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Coco Feng

China’s central bank is on track to set up the country’s second personal credit ratings agency, one that is backed by Xiaomi Corp, JD.com’s financial technology business and artificial intelligence unicorn Megvii.
The People‘s Bank of China (PBOC) said in a statement on December 4 that it had accepted the application of Pudao Credit Rating Co for such a licence and initiated a seven-day period to solicit public opinion, which concludes on December 10.
Beijing Financial Holdings Group, a company owned by the Beijing local government, will have a 35 per cent controlling stake in Pudao Credit, while JD.com fintech unit JD Digits will own 25 per cent, according to the PBOC statement. Xiaomi and Megvii will each have a 17.5 per cent stake.
It is unclear when Pudao Credit will receive its licence from the PBOC.
“Based on the issuance of the first [personal credit ratings] licence, I expect this second one to be approved in one to three months,” said Wang Pengbo, a senior finance analyst based in Beijing.
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In February 2018, Baihang Credit became the first personal credit information company licensed to operate in the world’s second-largest economy. Baihang Credit, which is backed by several companies including Alibaba Group Holding affiliate Ant Group and Tencent Holdings, obtained the licence nearly two months after the PBOC accepted its application. Alibaba is the parent company of the South China Morning Post.
The additional personal credit reporting platform could help provide a more comprehensive picture of an individual’s financial position and their credit risk.
“The upcoming second licence will be good for the fintech industry,” Wang said.
“Firstly, more companies will be able to conduct business based on personal credit, which will help them develop and standardise their operations,” he said. ”Secondly, the credit industry itself will be optimised when there is a second ratings agency.”
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Personal credit ratings firms can work with various financial institutions like microlenders and consumer loan providers.
Baihang Credit, for example, had partnered with more than 1,700 financial institutions as of May 22 to obtain data on more than 85 million people. It shared that information with nearly 1,000 institutions which signed up for the service, according to the firm’s latest report.
In addition, Baihang Credit also has access to other data, such as phone and travel records, which are deemed as “alternative financial information”.
In July this year, Baihang Credit was authorised to expand its credit rating business to cover enterprises.
Still, sharing data between fintech firms and a personal credit ratings agency can be complicated.
Ant Group, operator of digital wallet Alipay as well as a stakeholder in Baihang Credit, runs its own commercial consumer credit assessment service called Zhima Credit, which does not share information with the credit ratings agency.
“Zhima Credit does not exchange data with Baihang Credit, because the service scope does not include personal credit referencing and reporting,” said Shao Wenlan, former chairwoman at Zhima Credit, said in October last year.


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China’s central bank has accepted the application of Pudao Credit to operate another personal credit ratings firm in the world’s second-largest economy
Beijing Financial Holdings Group, a company owned by the Beijing local government, will have a 35 per cent controlling stake in Pudao Credit



A company backed by Xiaomi, JD.com’s fintech unit and AI unicorn Megvii is set to become China’s second personal credit ratings agency.
