Ant Group Cuts Credit Limit For Young People - PingWest

Ant Group Cuts Credit Limit For Young People

Ant Group Cuts Credit Limit For Young People

December 24, 2020 10:50 pm

Beijing (PingWest)- Ant Group is lowering borrowing limits for some users of its Huabei digital credit-card service, a quick response that the Chinese financial-technology giant is managing risk in its lending business following the second regulatory meeting with the country’s financial regulator.

Some users of Huabei said on social media that their credit limits were cut by a huge amount from a couple of tens thousands yuan to CNY2,000

Huabei is online lending service operated by Ant’s digital payment app Alipay. Its run like credit card, allowing people borrow money to make purchases online and it offers interest free for up to 40 days, then charge interests. The borrowing entrance have promoted spending among young Chinese consumers, college students and young adults without established credit histories have been able to obtain loans from Huabei.

Many shoppers can use Huabei to make purchases on e-commerce websites operated by Alibaba’s Group Holding.

Huabei and Jiebei (Alipay’s another popular credit card-alike service), have been Ant’s biggest revenue contributor in recent years.

Today, China’s financial regulators summoned Ant Group again for regulation on its financial service, which came after the first regulatory meeting on November 3- a few days before Ant’s record-breaking IPO.

Chinese regulators intensify their scrutiny on Ant Group as the regulators is worrying the company’s market dominance not only will disrupt the country’s banking sector but also create new potential risks to the country’s financial system.

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