So the Ant "credit restructuring” that Bloomberg wrote about today was actually written about back in Sep. Chinese analysts already talked about restructuring. I don't think they were expecting quite in this way but the acquisition of a "consumer finance" license was significant.

For context, the "consumer finance" license cost 4Bn RMB (~$600mm) and only 31 have been granted. Mostly to banks, but Xiaomi & Ping An have one, for example. It apparently took 2 yrs and is the last of 7 coveted financial related licenses for Ant to get.

https://36kr.com/p/887274599934464

The diff btwn consumer finance license & microlending license is detailed below but basically, the latter is overseen by local govts and the former by CBIRC. CF license is also ONLY for individuals & can be more flexibly funded, but also usage is tracked.

https://www.sohu.com/a/363147237_120489000

I'm not a fintech expert & my eyes kind of glaze over when it comes to licenses but the main point I got in Sept was this license is hard to get! By end of 2019 only Baidu (of BATJ) had it & only 3 approvals in 2017 & 2018 total. So this is mega COVETED.

http://www.xinhuanet.com/fortune/2019-11/01/c_1210336191.htm

My laywoman's understanding is that this new license is a lot more regulated (ie less leverage, bc hello, CBIRC) but actually is more flexible. What do you know, the CBIRC understands financial products better than local govt.

Actual experts should jump in since I am honestly a policy n00b but am not personally surprised that this seems a bit of when you boil it down the same old same old who regulates a new thing? local govt? or central govt (sector experts)? Many competing goals & people.

And to complete the thread, the Bloomberg article is here:

https://www.bloomberg.com/amp/news/articles/2021-01-07/ant-plans-credit-unit-overhaul-to-avoid-sharp-drop-in-loans