Xinlian

Xinlian is the full name of “Baihang Credit Information Co., Ltd.” The main purpose of the national online financial personal credit basic database, which is spearheaded by the establishment of the National Bank, is to include the financial credit data of individual customers that are not covered by the central bank’s credit reporting center, so as to realize information sharing in the industry and effectively reduce risk costs^[1].

According to the latest relevant announcement from the central bank, the full name of Xinlian is “Baihang Credit Information Co., Ltd.” with a registered capital of RMB 1 billion. The company’s application for personal credit information business has been accepted recently. Among the list of major shareholders, the China Internet Finance Association holds 36% of the shares, and eight personal credit pilot institutions, including Sesame Credit, Tencent Credit, and Shenzhen Qianhai Credit, all hold 8%.

On December 20, 2018, Xinlian was rated as one of the “Top Ten New Words of 2018” in the “Chinese Inventory 2018” jointly sponsored by the National Language Resources Monitoring and Research Center, the Commercial Press, and People’s Daily Online ”^[2].

What is the value of “Xinlian”? for example. Before the establishment of “Credit Union”, if your loan in Bank A was overdue and you applied for a loan from Bank B, you would most likely be rejected. The reason is that the personal credit information of banks A and B has been submitted to the central bank’s credit center database and shared. When you apply for a loan from Bank B, Bank B will check the borrower’s personal credit through the credit reference center, and the credit status will be clear at a glance. However, you can still borrow money if you turn to P2P platforms or small loan platforms. Because the central bank’s credit reporting system has not yet covered Internet financial platforms.

After “Xinlian” is established and successfully operated, once a user fails to repay a loan overdue, the personal credit information will be synchronized to the “Xinlian” personal credit database, and “Lao Lai” will have nowhere to go. Escape. By then, both traditional financial institutions and Internet financial platforms will close their doors to people with credit stains. More importantly, personal credit stains not only affect borrowing, but may also restrict high-end consumption and prevent you from taking trains, planes and other means of transportation.

The establishment of “Xinlian” solves the problem of data fragmentation and inability to share data between platforms, greatly improves the quality of platform risk control data, is conducive to the prevention and control of industry risks, and effectively avoids ” The occurrence of “shared debt”. More importantly, the industry environment is becoming more fair and orderly, allowing platforms to win the market more with rich scenarios and diverse data. For investors, the healthy development of the platform also means that they can invest with more confidence. In this way, a virtuous cycle between borrowing and lending can be established.

In addition, because some Internet financial platforms do not have sufficient risk control capabilities, in order to reduce the cost of bad debts and pursue short-term benefits, they have increased the platform borrowing interest rate, and even turned some cash loans into usury loans, increasing the financial burden. System risks. After the operation of “Xinlian”, the cost of credit reporting will also be reduced. On the one hand, it can reduce the investment of each platform in risk control. On the other hand, it will also encourage more and more people to repay their loans on time, reduce the platform’s bad debts, and increase profits. Naturally, it can be expected. This will also help the platform reduce loan interest and promote a reduction in the cost of funds for the entire society.

The value of “Xinlian” to individuals is even more visible and tangible. The improvement of the personal credit reporting system not only enhances the deterrent effect of breach of trust, but also increases the awareness and value of personal credit. People who break their trust will find it more difficult to move forward in the future; good personal credit means they can get more discounts and conveniences. The motivating effect of credit on individuals will become increasingly evident, and the standardized development of the credit reporting industry will also bring more innovative and customized products for individuals to carry out fraud warning and credit risk management.

Personal credit is valuable, but in an environment lacking monitoring, rewards and punishments, the value of personal credit cannot be fully realized. The establishment of “Credit Alliance” can reflect the value of personal credit to a certain extent, bring more standards to the industry, and bring more benefits to individuals. From this perspective, this is the value of “Xinlian” and it is also the embodiment of priceless credit.