Baihang Zhengxin Limited (百行征信有限公司), the state-backed consumer credit reporting agency officially opened for business on May 23rd. It is the first to obtain a license to operate a personal credit reporting business in China.
It will be mainly targeted at alternative lenders, particularly online lenders. Previously only China’s central bank maintained a credit information database, the Credit Reference Center, that has mainly been serving established traditional financial institutions while most of the online lenders don’t have access to.
The National Internet Finance Association of China (NIFA), a state-backed industry trade group, holds a 36% stake in Baihang. The eight companies that were approved by the central bank in 2015 to develop their own consumer credit scoring services, including tech giants such as Tencent and Alibaba’s fintech arm, each holds an 8% stake in it.
The eight member companies will reportedly share their data, technologies and other resources with Baihang.
Four of the eight backed by tech companies, Zhima Credit Management Ltd., Tencent Credit Ltd., Qian Hai Zheng Xin, and Kaola Zhengxin, had previously developed their own consumer credit scoring services based on to different extents alternative data generated from their own online services. It’s unknown to what extent they’d share their own data with Baihang.
The products and services provided by Baihang will include consumer credit reports, credit scores, and anti-fraud services.