A $7 Credit Limit: Jack Ma's Ant Lures Hundreds of Millions of Borrowers


Ant Financial is the largest fintech company in the world. Valued at $150bn, the spinoff from Alibaba has over 1 billion users of its fintech platform that includes payments, lending, insurance, wealth management, credit scoring and more. Huabei, Ant Financial's micro lending product, is a great example of how the company has come to dominate the market. Originally started as a lending product for customers looking to spend money on Alibaba, it has morphed into the dominant lending platform in China.

These days, Ant's credit lines are used by hundreds of millions of Chinese citizens to pay for groceries, restaurant checks, clothes and new iPhones from physical and online stores. More than half of Alipay's 900 million users in China have opened Huabei accounts, according to a former employee and estimates from two of Ant's shareholders.
Many Huabei users don't have traditional credit cards and some don't qualify for bank-issued credit cards. Only about a fifth of China's population, roughly 278 million people, held credit cards in 2017, according to World Bank data.
Delinquency rates on Huabei's loans are largely in line with those of credit cards in China. As of June, 1.6% of Huabei's outstanding loans were more than 30 days past due, while 1.2% were more than 90 days overdue, according to a document for bond investors. That same month, about 1.17% of credit-card loans in China were more than 60 days past due, according to China's central bank.

Given increased regulatory focus on Ant, the company is likely to push hard to grow its non-Alipay related businesses, as well as push harder to bring non-Chinese users onto the platform. As to questions around whether Ant is still worth $150 billion? Absolutely.


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