Technode reports today on local media reports in the mainland suggesting that Tencent is planning to join the fray with Alibaba and JD.com in the consumer-lending market, rolling out a service on its WeChat Pay that allows users to take out loans repayable in instalments.
The credit service, driven by new types of data modelling, has been booming, led by the two e-commerce giants, but Tencent has lagged. It has not been without controversy, with many reports suggesting these tech giants are responsible for an alarming rise in household debt in China, just as the economy has been slowing.
What we are more interested in is to see whether the eight new virtual-banking licensees in Hong Kong are able to follow this lead, and at what pace the HKMA will allow them to do so. Hong Kong’s banking sector has had a reputation for conservatism in personal lending. Will the new entrants, with savvier data-driven business models, blow this market open? It remains to be seen.