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By Jiang Xueqing and Chen Jia | China Daily | Updated:2017-11-28 07:06The National Internet Finance Association of China recently passed a resolution to jointly launch a personal credit information platform with eight third-party credit service agencies.
The NIFA will hold a 36 percent stake in the forthcoming platform, which is expected to have registered capital of 1 billion yuan ($152 million), and it will invest no more than 360 million yuan in the platform within five years.
The platform will mainly serve online personal lending institutions, in addition to other market players including traditional commercial banks, regulators and third-party credit service agencies.
It will achieve effective integration and full utilization of personal credit information, improve the risk pricing capability and risk management level of relevant market players, and promote the standardized development of internet finance, said financial industry participants and academics.
Wang Zhifeng, vice-president of Wacai, an online personal financial management platform, called the launch of the personal credit information platform “a developmental milestone” in the internet small-loan industry.
“It will help reduce overall risks in the online lending industry and will also enable better supervision of the credit profiles of small-loan borrowers by providing a credit rating service. Such a service is a crucial infrastructure in the industrys transition toward a standard and regulated one,” Wang said.
In recent years, it was not unusual to see an individual borrowing from multiple internet finance companies or making fraudulent loan applications, due to lack of personal credit information sharing and coordinated risk alerts.
Data from IntelliCredit, a Beijing-based credit information service provider, show that about 81 percent of applicants for cash loans, a type of small consumer loan, borrowed from multiple lenders for four to 10 times on average.
Now the top regulators will clear the largest obstacle that has hindered the development of the internet small loan sector for years, Wang noted.
“According to the rules, borrowers default reports will be recorded and shared, which enables a fairly priced risk profile to be built,” he said.
Huang Zhen, a professor at the Central University of Finance and Economics, said the NIFA will build an integrated personal credit information sharing mechanism by launching the platform, as the existing credit reporting system cannot meet the demands of small loan companies and peer-to-peer lending platforms, through which individuals could lend money directly to unrelated people and businesses.
“It will also make unified credit reporting standards for various kinds of financial institutions and make decisions on how to use big data, such as tax and lawsuit information, to evaluate personal credit and which data to use,” Huang said.
He expected that the platform will expand its membership from the eight third-party credit service agencies, such as Tencent Credit Services and Pengyuan Credit Service Co Ltd, to a wide range of market players, including other credit service agencies and relevant companies with a strong need for personal credit information.Related StoriesSharing economy gets credit edgeUnified credit rating system expected soon, say expertsCredit growth slows down in OctCredit growth is shot in financial armEasy credit bolsters startups, supply firmsPhotoRenowned sneaker designer has million-yuan handsThe worlds top 10 tech cities in 2017Yiwu global manufacturing expo gets underwayJack Ma lectures African entrepreneurs at AlibabaChina-developed AC312E helicopter completes plateau testsYoung Kenyan gets share of Chinas internet celebrity economyMost Viewed in 24 HoursState Council NewsChina to establish Made in China 2025 national demonstration zonesPremier Li meets with Chinese team of World Skills CompetitionTop 10Top 10 cities with most digital talentsEditors picksSamsung unveils intelligent assistant BixbyChina to land on Mars in 2021 despite challengesChina DataTop executives of US companies share views on innovationQ&A With CEOSights and sounds of the future3D caught in sharp focusSpecial2017 Summer DavosChinas Q1 economic dataBACK TO THE TOPHOMECHINAWORLDBUSINESSLIFESTYLECULTURETRAVELWATCHTHISSPORTSOPINIONREGIONALFORUMNEWSPAPERChina Daily PDFChina Daily E-paperMOBILECopyright 1995 -var oTime = new Date();
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