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China’s Private Sector Credit Information Services: The Baihang Story

Three years after eight commercial firms were granted permission by the People’s Bank of China (PBOC) to start their pilot programmes in operating personal credit information systems in 2015, none of them have received a license.

Instead, they have now become shareholders and active contributors to a new unified platform that has access to an enormous number of personal credit data.  At the so-called ‘trust alliance’ (信联) Baihang Credit (百行征信), state level and commercial organizations join forces in further developing China’s credit systems.

Baihang & Allies: An Abundance of Personal Data   The formal launch of Baihang Credit (百行征信), the “first unified personal credit information firm” of China, has become big news in Chinese media, with some calling it a personal credit industry game changer.  Baihang Credit is a joint venture of the aforementioned eight and the China Internet Finance Association.

It received its license in February of this year. The firm officially opened for business on May 23rd of 2018. While the China Internet Finance association reportedly holds 36% of the Baihang firm, the other eight shareholders each hold 8% (Zhang & Liu 2018).  The eight companies are not just financial investors, but also active contributors and sharers of technology, resources, and data for the Baihang firm.  

The launch of this joint establishment means that both state-level institutions and commercial enterprises combine their efforts in building a strong personal credit investigation and services platform.  Fhe new system now links data collected by these powerful firms such as Tencent to the state-level China Internet Finance Association, which in itself is an initiative by the People’s Bank of China.  Besides basic data including personal information, education level, salaries or employer, companies such as Sesame Credit or Tencent also have access to a rich collection of consumer data, ranging from social media, e-commerce purchases, online travel data, to location, phone records and even social connections.

The eight firms will also play an important role in Baihang’s management. Sesame Credit, Tencent Credit, Qianhai Credit, Sinoway and Koala Credit have all entered the company’s board of directors. The other three companies will join the board of supervisors (Sina Finance 2018). The 57-year-old Zhu Huanqi (朱焕启) will be Baihang’s CEO and president; he previously worked at Huida Asset Management. The PBOC told Caixin Global that all parts of the eight companies that previously dealt with personal credit ratings will now be incorporated into Baihang. The other parts can continue to operate as data service providers. In the future, Sesame Credit, for example, will continue to research commercial credit services.

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Source: Whats on Weibo

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