About Pudao Credit

Pudao Credit

Pudao Credit Co., Ltd. (Chinese: 朴道征信) is a personal credit reporting company based in Beijing. Approved by the People's Bank of China (PBOC) in December 2020, it became China's second licensed market-oriented personal credit reporting agency, ending the two-year period in which Baihang Credit, founded in Shenzhen in 2018, had been the only such institution. Pudao was established with registered capital of 1 billion yuan and an ownership structure that paired a Beijing municipal state-owned financial group with some of China's best-known technology companies.

Like Baihang before it, Pudao collects personal credit information from financial institutions and service providers and supplies credit assessments, ratings and risk reports to banks and other subscribing institutions. Its licensing formed part of a broader tightening of China's credit reporting rules, under which personal credit information used in financial activities must be handled by licensed agencies operating under central bank supervision.

Background: why a second licence

China's personal credit reporting system has two pillars. The first is public: the Credit Reference Center of the People's Bank of China, whose national financial credit information database has operated nationwide since 2006 and pools data mainly from banks and other traditional lenders. By the end of 2019, official data cited in industry reporting showed that system had collected data on about 1 billion individuals and 28.3 million enterprises and other organisations. The second pillar is market-based, created to capture the lending that happens outside traditional banking — microlending, consumer finance and online lending.

For that second pillar the PBOC moved cautiously. In 2015 it had allowed eight private firms to pilot personal credit reporting, but in 2017 it declined their licence applications, citing concerns about privacy and independence. The compromise was Baihang Credit, a consortium bureau established in 2018. By 2020, however, China's retail finance sector was still expanding, and a source familiar with the matter told Caixin that the two existing platforms — the Credit Reference Center and Baihang — were struggling to meet the growing demand created by the booming retail finance sector. A second market-based licence, anchored in the capital, was the regulator's next step.

Application and approval

The PBOC announced in early December 2020 that it had received Pudao's application to enter the personal credit reporting business. Caixin reported the application on 7 December 2020, noting that Pudao would be based in Beijing with registered capital of 1 billion yuan — about 152.9 million US dollars at the time — and that Zhao Yihan, a deputy director-general of the PBOC's Credit Reference Center, was set to be appointed its chairman.

The approval was reported in the same period. On 4 December 2020 the Reuters news agency reported that the central bank had granted approval for the set-up of the agency — described in that report as Pudao Credit Rating Co Ltd — making it the second personal credit agency licensed by the PBOC. The appointment of a senior Credit Reference Center official as chairman underlined how closely the new bureau was tied to the central bank's existing credit reporting establishment, even as its shareholding brought in major private technology investors.

Ownership and shareholders

Pudao's largest shareholder is Beijing Financial Holdings Group, a financial holding company owned and controlled by the Beijing municipal government, with a 35 percent stake. The second-largest is JD Digits — Jingdong Digits Technology Holding, the fintech arm of e-commerce group JD.com — with 25 percent. Beijing Xiaomi Electronic Products, an affiliate of smartphone maker Xiaomi, holds 17.5 percent, and facial-recognition company Megvii Technology also holds 17.5 percent. The remaining 5 percent was reported to be held by a private equity firm.

The composition was widely read as a statement of regulatory intent. Where Baihang had been a consortium of an industry association and eight equal private shareholders, Pudao put a state-owned financial group firmly in the lead, with technology companies — JD.com's fintech unit, Xiaomi and Megvii — as substantial but minority partners. Contemporary reporting noted that the shareholding underscored regulators' heightened scrutiny of consumer credit and internet-based loans, particularly loans to small and medium-sized enterprises, at a moment when the PBOC had also tightened its guidelines on online lending, including stricter capital requirements and limits on individual borrowing.

What Pudao does

Personal credit reporting firms of Pudao's type gather data from financial institutions and service providers, then share that data with, and provide risk assessment reports to, institutions that subscribe to the service. Reporting on Pudao's licence described it as permitted to build a system offering personal credit ratings for the banking and financial services sector, augmenting the coverage first established by Baihang.

Beyond conventional financial records, such agencies may also draw on alternative information — reporting at the time of Pudao's licensing gave travel and telephone records as examples of the kinds of alternative financial information a licensed bureau might access. The PBOC's own account of the sector describes market-based agencies as developing in accordance with the principles of ensuring third-party independence, objectivity and impartiality, and protecting personal interests and rights to privacy, with massive volumes of personal non-credit alternative data shared and used through them.

Scale of operations

The clearest official measure of Pudao's early scale comes from the People's Bank of China itself. In a PBOC account of building an inclusive credit information system, the central bank reported that, as of the end of August 2022, it had granted business licences to two personal credit reporting agencies — Baihang Credit and Pudao Credit — and that Pudao had included data on 157 million people and provided 1.013 billion services. The same account put Baihang's corresponding figures at 496 million people and 3.859 billion services, reflecting Baihang's two-year head start.

Those figures place Pudao among the largest personal credit databases in the world by population covered, less than two years after its approval. They also show the division of labour the PBOC envisaged: a public database at the centre, holding the records of more than a billion individuals by the early 2020s, flanked by licensed market-based bureaus specialising in the non-bank and alternative data that the public system historically captured least well.

Regulatory environment

Pudao began operating just as China's credit reporting rulebook was being rewritten. The framework law is the Regulations on the Credit Reporting Industry, in force since 2013. On top of it, the PBOC issued the Measures for the Administration of the Credit Reporting Business — released in September 2021 and effective from 1 January 2022 — which state that only licensed institutions may conduct credit reporting business and lay out detailed principles governing each stage of data management, from collection through processing to provision. The Personal Information Protection Law, which took effect on 1 November 2021, added a further layer of obligations on handling personal data.

For Pudao, the 2022 measures were doubly significant. They tightened the conditions under which it must operate — candidate and central bank descriptions alike note that it works under rules tightened from 2022 to protect personal information and data security — and they channelled business towards it: personal credit information legally collected to assess creditworthiness in financial activities must pass through licensed agencies, and fintech platforms undergoing regulatory rectification were given until the end of 2022 to bring their credit reporting operations into compliance, in practice by working through bureaus such as Pudao and Baihang.

Relationship with Baihang Credit

Pudao and Baihang are the two halves of China's market-based personal credit reporting sector, and they are routinely compared. Baihang, owned by an industry association and eight equal private shareholders, reached larger headline numbers earlier; Pudao, with a state-owned anchor shareholder and concentrated technology investors, was described by sources cited by Caixin in 2024 as the better-supported of the two, while Baihang underwent an equity restructuring. PBOC officials, for their part, have emphasised that the nationwide credit reporting companies — Pudao and Baihang named together — are not competitors of the central bank's Credit Reference Center, which forms part of China's national financial infrastructure; the licensed bureaus complement it.

A third bureau, Qiantang Credit of Hangzhou, was later licensed to join them, but for the first years of the 2022 regulatory regime the market-based system rested on the Beijing–Shenzhen pair of Pudao and Baihang.

Headquarters and identity

Pudao is registered and headquartered in Beijing, China's capital and the seat of the People's Bank of China and of its largest shareholder's owner, the Beijing municipal government. Its Chinese name, 朴道征信, combines characters evoking simplicity and the proper path with the standard term for credit reporting, zhengxin. Its full legal name is Pudao Credit Co., Ltd., though some early English-language reporting rendered it as Pudao Credit Rating Co Ltd.

Significance

Pudao Credit matters because it set the template for Chinese personal credit reporting after the consortium experiment. Its licence ended Baihang's monopoly, its state-anchored ownership prefigured the structure later used for Qiantang Credit, and its early operating figures — 157 million people covered and more than a billion services provided by August 2022, on the central bank's own reporting — demonstrated how quickly a licensed bureau could scale once the 2022 rules directed the industry's data flows through licensed channels. For lenders assessing Beijing's vast consumer market and for the fintech platforms required to work through licensed agencies, Pudao became one of the two gateways to lawful personal credit reporting in China.