Ant Financial Services Group plans to hike registered capital in its consumer finance units to US$1.79b

Alibaba's financial services affiliate Ant Financial Services Group plans to boost registered capital in its consumer finances businesses to 12 billion yuan (US$1.79 billion) to support the healthy development of the consumer finance market in China amid a recent crackdown on unlicensed cash-loan services .

"The investment will allow Ant Financial’s consumer finance businesses to better meet customers’ financial needs, and we will reserve the option to further increase registered capital in the future based on business operations and regulatory requirements," said an email statement today.

The combined registered capital of Chongqing Mayi Micro Loans Co Ltd, which operates Ant Financial's credit pay service Huabei, and Chongqing Mayi Shangcheng Small Loans Co Ltd, which handles cash loan service Jiebei, will be raised from 3.8 billion yuan to 12 billion yuan.

"We have always been determined to develop our consumer finance services to support the development of the real economy and we'll take strict measures to make sure we follow regulatory rules and meet new guidelines," the company said.

Earlier this month, the People's Bank of China and the China Banking Regulatory Commission jointly released new rules to curb issuing of unlicensed and unsecured short-term small loans usually made through online channels. 

Huabei provides a revolving credit line for Alipay users' purchases when they shop at both online and offline merchants while Jiebei targets Alipay users who have short term cash demands. Jiebei's annual interest rate is around 14.6 percent and the average loan size is about 3,000 yuan, according to official data.

The maximum legal annual interest rate in China is 36 percent.