Alipay, an online payment platform by Ant Group, will have to spin off its loans business into a separate app after the Chinese government ordered its restructuring, Financial Times reported. The new diktat also calls for Ant Financial, the parent company of Alipay, to turn over user data to a joint venture created to determine credit scores, the report added. The new rules will be applicable to all online lenders in China as the country's central bank directed that lending decisions must be made based on data from an approved credit scoring company rather than proprietary data, FT added. Alipay’s lending unit, CreditTech, consists of Huabei (a credit card company) and Jiebei (offers small unsecured loans). China has initiated a crackdown on large tech companies over the last few months as it seeks to cut down their monopolies to size. The state believes that the government must limit data collected by tech giants lest they create alternative power centres in the country. The move stands to affect Ant’s lending business which has now overtaken its payment processing business in the first half of 2020, FT stated in its report. Alipay’s lending unit’s size also caused concern among regulators over predatory lending and financial risk. Ant Group’s tussle with Chinese regulators China has had Ant Group in its crosshairs for some time now. The scheduled initial public offering (IPO) of Ant Group was thwarted by authorities in November 2020. The listing was suspended by the Shanghai stock exchange after Chinese…
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