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Jack Ma’s Ant Group Slashes Credit Limits for Some Younger Borrowers in China

Ant Group Co. cut borrowing limits for some users of its popular digital credit-card service, a sign the financial-technology giant is dialing back risk in its lending business following pressure from Chinese regulators.

The Hangzhou-based company on Wednesday said Huabei, one of its consumer-lending platforms, is lowering credit limits for some younger borrowers “to promote more rational spending habits.” Ant didn’t provide the age range or other details about users who were affected by the changes.

Huabei, which means “just spend,” lets individual users of Ant’s ubiquitous Alipay mobile app borrow money to make purchases online and in stores using their smartphones. Ant, which is controlled by billionaire Jack Ma, calls Huabei a digital unsecured revolving-credit product for daily expenditures. It functions very much like a credit card, letting people borrow interest free for up to 40 days, then charging interest on their outstanding balances.

College students and working adults without established credit histories have been able to obtain loans from Huabei, which typically increases individuals’ borrowing limits after they repay their loans consistently.

The ease and convenience of getting online loans has helped fuel spending among young Chinese consumers, and short-term household debt in China has climbed in recent years. Many shoppers on e-commerce websites operated by Ant’s affiliate Alibaba Group Holding Ltd. also use Huabei to fund their purchases.

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