China's internet firms cautiously revive lending as Beijing pushes consumer loans

China’s internet platforms are quietly reviving consumer lending, taking Beijing’s push to make household borrowing cheaper as a signal that regulators may be easing a years-long crackdown on the sector, four industry sources said.

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Beijing began reining in what it described as “disorderly expansion” by internet platforms in 2020 by pulling the initial public offering (IPO) of Alibaba-affiliated Ant Group, followed by business restructuring orders and fines on Ant and others.

In August, however, needing to spur weak consumption while managing a trade dispute with Washington, China introduced consumer-loan interest subsidies, naming Ant and Tencentbacked WeBank alongside traditional banks as eligible lenders.

INTERNET PLATFORMS COME UP FOR AIR

Internet platforms read the move, and earlier high-level meetings between Chinese leaders and prominent privatesector bosses, as a green light to cautiously expand in consumer lending.

“The regulatory landscape has become more accommodative,” said an industry source. “With the current economic situation being challenging, the economy needs torely on large internet finance platforms.”

“At this point, expansion is a strategic choice and no longer a regulatory constraint,” said the source, echoing similar remarks from three others. All commented on condition of anonymity as they were not authorized to speak to media.