China: Alibaba and Tencent refuse to share loans data with government-backed credit scoring company

Author: Yuan Yang & Nian Liu, Financial Times, Published on: 23 September 2019

“Alibaba and Tencent refuse to hand loans data to Beijing”, 19 Sep 2019

China’s tech giants Tencent and Alibaba are refusing to co-operate with a government-backed credit scoring programme by withholding access to their troves of customer loans data, according to two people familiar with the project.

The People’s Bank of China launched Baihang, a private credit scoring company, in March 2018 in order to create a national system that would cover the 460m Chinese who have no formal credit histories but who may be relying on the country’s vast fintech sector for loans…

Tencent’s Tencent Credit and Alibaba’s Sesame Credit, part of its Ant Financial payments affiliate, were forced to abandon their own attempts at building credit-scoring schemes after the PBoC revoked their permissions to do so in February 2018.

Instead, the PBoC set up Baihang and made the fintech giants shareholders in the new company in an attempt to break the tech giants’ oligopoly on credit data. But the new shareholding scheme has not smoothed the path to co-operation.

… Tencent and Sesame hold the most customer data by far of any of their peers…

“We’d like to get personal information and credit data from Tencent and Alibaba,” said one Baihang employee who asked to stay anonymous. “Names, ID and phone numbers, histories of borrowings and paybacks.”

A former employee of Tencent, who was familiar with the negotiations between Baihang and its member companies, also confirmed that Tencent and Alibaba were not sharing their loan transaction data.

… Sesame Credit declined to comment. Baihang and Tencent did not respond to requests for comment.

Tencent Credit and Sesame Credit are among eight fintech companies, including Ping An Bank’s Qianhai Credit and Kaola Credit, that each own an 8 per cent share of Baihang. The National Internet Finance Association, an industry body, holds the remaining 36 per cent.

By April this year, over 700 financial institutions and companies, mostly online microlenders, had connected to Baihang’s credit database, according to state media…

However, according to the Baihang employee, only three of the eight shareholding companies have agreed to feed their data into Baihang’s system…

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Related companies: Tencent