Chinese fintech giant Ant Group has dramatically reduced the amount of credit available via its Huabei (花呗) consumer finance product for certain younger users.
Since the start of the week Huabei has sent notices to customers throughout China informing them that their “Huabei credit has been reduced to 3000.00 yuan, based on usage habits and repayments capability, and following comprehensive assessment.”
The move has come as a shock to much of Huabei’s customer base, which currently exceeds 100 million users and is primarily situated in smaller Chinese cities.
Ant Group announced on 23 December that Huabei is “currently in the process of adjusting quotas for certain younger users, in order to guide them towards more rational consumption habits.”
The move comes at a highly fraught period for both Ant Group and China’s online finance sector, with Beijing announcing the launch of an anti-trust probe into Ant on 24 December, and as well as the holding of “regulatory discussions” with the company’s senior executives.
Chinese regulators shelved Ant Group’s long-awaited IPO on the Shanghai and Hong Kong bourses at the start of November, while also launching new rules that impose far tighter restrictions on Internet finance.
Earlier in December Ant Group and other leading Chinese tech companies, including JD.com, Du Xiaoman and Tencent, all removed deposit products form their online platforms in response to demands from regulators.