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Phone loans

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Playing games on your phone might once have been viewed as the preserve of the timewaster, but now Tencent users are finding that busy thumbs are actually helping them get a better credit score.

Peer-to-peer lender China Rapid Finance has used data provided by the social network giant to rate the creditworthiness of 50 million Chinese consumers, the Financial Times reports.

China Rapid Finance evaluates an individual’s financial trustworthiness based on how long they spend on Tencent platforms. The company argues that a frequent user is “more conscientious of their reputation”, and thus more likely to repay credit. Within the first 6 months of operation, China Rapid Finance has utilised Tencent’s data to provide 3 million peer-to-peer (P2P) loans.

The company claims it is filling a gap in the market of 500 million consumers with no credit history. The cost of filling that gap is reflected in their higher loan rate, clocking in at 21% per year.

It is too early to judge the success of this initiative, but speculative reports suggest the company’s losses on loans are only slightly higher than their traditional counterpart’s.


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