• With little formalized credit history, many Chinese still rely on cash economy.

With little formalized credit history, many Chinese still rely on cash economy. (Photo : Getty Images)

U.S. big data firm ZestFinance, which specializes in credit scoring, received a huge boost as Chinese Internet giant Baidu reportedly made its second investment in an American fintech firm, according to TechCrunch.com.

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Earlier last month, the company that runs the dominant search platform in China partook in $60 million round for Circle, a payments firm headquartered in the Western country.

Under its most recent investment, Baidu is set to use ZestFinance's technology to create "a credit scoring platform based on its search data," the article wrote.

This move is seen strategical by experts as traditional credit systems are broken in China -- there is scarcity in a formal credit history data and a number of Chinese are either unbanked or not heavily users of it if they have an account.

Thanks to the Internet, new opportunities and avenues have emerged to reach and tap potential credit costumers.

"China interests me from a mission perspective. There are a lot of people who deserve credit but live in a cash economy [with] no formal banking service to serve them," ZestFinance founder and CEO Douglas Merrill told TechCrunch.

For Tony Yip, Baidu's global head of investment, mergers and acquisitions, "ZestFinance's unique ability to analyze and process complex, disparate data to make accurate credit decisions is very valuable to the Chinese credit market, where a centralized credit scoring system has yet to emerge."

"We look forward to working together to help transform the financial services market in China," Yip further enthused.

Founded by a former Google CIO and VP of engineering, ZestFinance harnesses the power of big data and machine learning to transform information into measures that may be used for credit scoring.

Apart from Baidu, another Chinese Internet powerhouse, JD.com, also poured in investments to the U.S. firm.

Merrill expressed satisfaction with its two partnerships in the country, saying: "We find China fascinating, we feel like we can help do something to help the world."