Alibaba-backed Ant Group has been approved by the Chinese market regulator to operate a consumer finance company, according to CNBC. Ant will control 50% in the new entity and contribute 4 billion Chinese Yuan or $625.93 million in registered capital.
The move by China Banking and Insurance Regulatory Commission is a relief to Ant which has faced forced restructuring and had its IPO stopped by the regulator.
The new company will be based in Chongqing city, with a registered capital of 8 billion Yuan that will see six other shareholders contribute 4 billion Yuan.
The consumer finance company will issue personal credit and bonds and accommodate Ant’s credit entities Jiebei and Huabei.
Ant will be mandated to disclose the loan issuing institution in the new agreement with CBRIC.
Ant’s approval is a twist as Chinese regulators became concerned of the impact finance technology companies will have on market stability.
Alibaba stock is currently declining. 9988: HKG is down 1.68%.
