China's Ant Group Small Loan Business 'Huabei' Separation Countdown Begins

Operating Only Huabei Personal Loans After Separation... Significant Reduction in Usage Limits Announced
Consumer Confusion Inevitable Due to Huabei Limit Cuts Mainly Affecting Users in Their 30s and 40s

[Asia Economy Beijing=Special Correspondent Jo Young-shin] Huabei, the credit loan division of Ant Group under Alibaba Group, has begun the separation process. Chinese authorities have instructed the separation work, stating that the inappropriate relationship between Alipay, Huabei, and Jiebei must be severed.

[Image source=Reuters Yonhap News]

On the 24th, according to Chinese economic media Caixin, Ant Group decided to separate Huabei, its credit loan division and brand, and has started the full-scale separation process.

Caixin, citing sources familiar with the separation work, explained that once the separation is complete, Huabei will be responsible for credit loan operations and will continue to use the Huabei brand as is.

After the separation process is completed, Huabei will operate based on individual credit.

Caixin reported that some individual users of Huabei have already seen their credit limits reduced. There have been cases where the limit dropped from 100,000 yuan to 1,000 yuan depending on personal credit scores. It also forecasted that users with high personal debt on Huabei could see their loan limits significantly reduced according to their creditworthiness.

Caixin cited Alipay’s 2020 "Youth Consumption Life Report," stating that Huabei has 500 million users, with the main users being young people. By age group, users in their 40s account for 48.5%, followed by users in their 30s at 33%, and users in their 50s at 14.3%.

Ant Group has been criticized for mostly sourcing funds from Chinese small and medium-sized banks and making easy profits. It is known that Huabei alone generated operating profits of 4 billion yuan (approximately 744.6 billion KRW) for Ant Group last year.

This content was produced with the assistance of AI translation services.