National Personal Credit Platform Appoints Chairman

The chairman of a wholly-owned central bank subsidiary, Zhu Huanqi, has been appointed chairman of a planned national personal credit-information platform, Caixin has learned from sources familiar with the matter.

The appointment was announced Thursday evening at the board meeting of the platform, which has not been named or officially registered but is led by the National Internet Finance Association of China (NIFA). NIFA was set up in early 2016 by the People’s Bank of China (PBOC) and other financial regulators.

As the chairman of Huida Asset Management Co. Ltd. — a subsidiary of the PBOC — 57-year-old Zhu specializes in dealing with non-performing assets. He previously occupied multiple positions at the PBOC and the State Administration of Foreign Exchange (SAFE).

With China's microlending market exploding in recent years, the demand for building a unified personal credit-information platform has grown more urgent.

Unsecured short-term microloans target borrowers such as students and factory workers, most of whom have been traditionally excluded from access to licensed financial institutions and neglected by the central bank’s Credit Reference Center. The industry has seen an increasing number of customers borrowing from multiple lenders simultaneously and frequently incurring new debts to pay back old ones, which has caused potential risks in the financial system.

The PBOC launched a third-party credit-reporting pilot program in 2015, involving eight companies, including Sesame Credit Management Co., a subsidiary of Ant Financial Services Group, and Tencent Credit Services. But the central bank has not issued a license to any of these companies due to their failure to efficiently meet market demand and regulatory standards.

In order to control risk for microlenders, NIFA has led eight pilot companies in building an authoritative personal credit-information platform along with a new nationwide borrower database. The total registered capital of the platform is set to be 1 billion yuan ($661 million). NIFA will hold a 36% stake in it, and each of the eight companies will purchase an 8% stake, according to a NIFA document seen by Caixin.

There will be 13 members on the platform’s board of directors, including five from NIFA, five from five of the pilot companies and three from the management team. Three other companies have the right to recommend three representatives to form the board of supervisors.

Contact reporter Lin Jinbing (jinbinglin@caixin.com)