Ant Financial's consumer lending business appears to be facing serious regulatory headwinds, with a 74 percent quarter-over-quarter decline in sales of asset backed securities tied to consumer lending.
As the pace of such fundraising slows, there are signs it will remain sluggish. China’s two exchanges have granted Ant Financial four quotas for ABS sales this year, each with a size of 8 billion yuan. In contrast, most of the quotas granted last year were for 30 billion yuan. That’s all adding to risks of a slowdown for the firm’s lending business. Tech companies can’t take deposits like banks, so the ABS, which are generally sold to institutional investors, give such lenders a way to raise funds.