Wednesday, September 22, 2021
Martin Hennecke

Ant faces Alipay breakup and loans hitch
Beijing wants to break up Alipay, the hugely popular payments app owned by Jack Ma Yun's Ant Group, and create a separate app for the company's highly profitable loans business, the Financial Times reported. The plan will also see Ant turn over user data that underpins its lending decisions to a new credit scoring joint-venture that will be partly state-owned, the FT reported, citing two insiders State-backed firms are set to take a sizable stake in Ant's credit-scoring joint venture for the first time, three people told Reuters last week. The partners plan to establish a personal credit-scoring firm wherein Ant and Zhejiang Tourism Investment Group - a state-owned company in Ant's home province, will each own 35 percent. Other state-backed partners, Hangzhou Finance and Investment Group and Zhejiang Electronic Port, will each hold slightly more than 5 percent, said one of the sources. It is believed that the fintech group will have a big say on the operation of the new joint venture, but the new set-up will ensure Ant listens to Beijing when it comes to critical decision-making, a former People's Bank of China official told the paper. Ant will not be China's only online lender affected by the new rules. In April, regulators asked Ant to conduct a sweeping overhaul, including turning Ant itself into a financial holding firm, and folding its two lucrative micro-loan businesses Jiebei, which makes small unsecured loans, and Huabei, a virtual credit card, into the new consumer finance firm.

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