The Chinese regulator has imposed new restrictions on banks and financial institutions working with online micro-lenders, including those led by the fintech company Ant Group (a subsidiary of Alibaba, founder Jack Ma). Bloomberg reports. Thus, the authorities dealt a new blow to Ma’s business.
Now banks have to limit the total volume in conjunction with online lending platforms. Its level should not exceed 50 percent of the amount owed. The volume of joint lending with one platform must be below 25 percent of the bank’s net capital.
Such regulation will inhibit further growth of Ant, the newspaper writes. The company has disbursed 1.7 trillion yuan ($ 263 billion) in consumer loans to 500 million people as of June 30, 2020. However, at least ten banks have stopped partnering with consumer lending platforms in recent months due to tightening regulations.
Earlier it became known that the reason for the enmity, due to which the Chinese authorities blocked the IPO (public offering of shares) of Ant Group, could be an investigation into the possible beneficiaries of the transaction. Among them were people associated with political clans that are displeasing to the current government. In February, Ant Group and Chinese regulators agreed on a restructuring plan that will turn the company into a financial holding.