With the blessing of China’s leaders, finance arms began sprouting out of internet companies of all kinds, including the search engine Baidu, the retailer JD.com and the food-delivery giant Meituan. Between 2014 and 2019, consumer credit from online lenders nearly quadrupled each year on average, by one estimate. Nearly three-quarters of such platforms’ users were under the age of 35, according to iiMedia Research.
Last year, when Ant filed to go public, the company said more than $260 billion in credit was being extended to consumers on Alipay. That meant Ant alone was responsible for more than 12 percent of all short-term consumer lending in China, according to the research firm GaveKal Dragonomics.
Then in November, officials torpedoed Ant’s I.P.O. and got to work taking apart the plumbing that had connected Alipay with China’s banks.
They ordered Ant to make it less convenient for users to pay for purchases on credit — credit that was being largely funded by banks. They barred banks from offering deposits through online platforms and restricted how much banks could lend through them. At some banks, deposits offered through digital platforms accounted for 70 percent of their total deposits, a central bank official said in a speech.
In a news briefing last week, Fan Yifei, deputy governor at the central bank, said regulators would soon be applying the full Ant treatment to other platforms.
“On the one hand, the speed of development has been astonishing,” Mr. Fan said. “On the other hand, in the pursuit of growth, there have arisen monopolies, disorderly expansion of capital and other such behaviors.”
Ant declined to comment.
As Ant and Tencent scramble to meet regulators’ demands, they have pared credit services for some users.