Ant Group, the affiliate firm of China’s Alibaba Group, has reportedly announced plans to differentiate Jiebei, a unit of its short-term consumer loan business as part of a Beijing-led reform focused on curbing some of its more freewheeling companies.
Ant, Alibaba Group's financial unit, had its $37 billion IPO thwarted by authorities last year and has been attempting to transform itself into a financial holding company since.
As per reports, after Chinese authorities forced Ant to execute a broad corporate reorganization in April this year, which included combining its credit services Jiebei and Huabei into a newfound consumer financial firm.
Authorities also chastised Huabei and Jiebei for making improper connections between payment systems and financial services, claiming that this may have resulted in customers being over-marketed lending services.
According to the borrowers, Jiebei had changed to show which loans were given by Chongqing Ant Consumer Finance Co and which were offered by banks.
Ant Group stated that Jiebei is steadily focusing on brand differentiation, emphasizing that consumer credit services offered individually by banks as well as other finance companies will be offered on a ‘credit loan’ page.
Ant declined to say how much of its business will be impacted by the brand distinction.
According to reports, the firm has been ordered by authorities to finalize the branding reorganization of Huabei and Jiebei within six months of its consumer finance firm's launch.
In June, Ant's consumer finance unit received permission to commence operations in Chongqing.
According to the company’s IPO prospectus, within the 12 months leading up to June 30, 2020, 500 million people used Huabei and Jiebei.
Ant's digital credit card provider Huabei began sending its customer credit data to a database operated by China's central bank in September this year, marking a significant step forward for both the business and authorities as Beijing strengthens its control on the nation’s financial tech industry.