Tencent unveils its own film unit, Tencent Penguin Pictures. (Photo : www.technode.com)
Micro loans at WeBank, the online lender owned by Chinese Internet titan Tencent, have swollen over the past two months, as the Internet bank announced on Monday, July 27, that it has extended more than 800 million yuan ($130 million) to borrowers, the Xinhua News Agency reported.
According to WeBank, the loans were made on Tencent's QQ, a popular online instant messaging app, where users can apply using their mobile and get up to 200,000 yuan in credit. The loan does not require collateral or a guarantee, and has a daily interest rate at 0.05 percent.
When Chinese financial regulators initiated a program to nurture private lenders that will help China's small firms with their funding needs, Tencent and its rival Alibaba both opened their own banks, since the country's large state lenders do not cater to small companies.
Tencent said that hundreds of thousands of QQ users have been given loans, without disclosing an exact number.
Ma Zhitao, WeBank's chief information officer, said that the credit allowed to be given to an applicant is based on his or her creditworthiness, which is calculated through user data that Tencent has accumulated on its online platforms. This includes personal information such as ID, behavior on QQ, and data from third-party providers.
Tencent said that it was planning to formally launch the credit check system that it has been developing for some time.
The report said that Alibaba has also implemented similar checks on its payment app, as a way to assess and determine if an applicant should be extended credit.
The report added that Chinese regulators encourage the services as they help complement the Central Bank's credit profile database, in which individuals and small firms are not covered.
Internet lenders have firmly believed that behavior recorded on social networking sites, online shopping and instant messaging could determine people's creditworthiness.
"Data accumulated on the Internet can make a significant contribution to existing credit profiles and it can be helpful in controlling risks in the financial market," Lyu Qisui, a professor of finance at Peking University, said.
