(Yicai Global) Jan. 10 -- Jack Ma's Ant Financial Services Group, a provider of asset-backed securitization products, put money into two affiliated small loan companies despite Chinese regulators intensifying scrutiny of the sources of such lenders' funds, insiders told Yicai Global.

The fintech arm of Chinese internet giant Alibaba Group Holding Ltd. has funneled CNY8.2 billion (USD1.3 billion) into the units, bringing their total registered capital to CNY12 billion.

The total value of ABS products backed by small loans was CNY147.5 billion last year, with Hangzhou-based Alibaba accounting for more than CNY140 billion, per data from the Wind Investment Terminal operated by Wind Information Co.

The National Association of Financial Market Institutional Investors and the Shanghai and Shenzhen Stock Exchanges have suspended application reviews for the issuance of ABS consumer and cash loans. When these will resume is unclear, sources close to regulators said. Authorities are studying listing rules for ABS consumer loans, but their release date is uncertain, a Shanghai Stock Exchange insider said. Other sources said preparing rules for ABS consumer loans is problematic.

Even with the increase in funding from Ant Financial, meeting leverage ratio regulatory requirements may prove difficult if already issued ABS products are withdrawn, industry insiders said.

Ant Financial may need to keep upping funding for the small loan companies or transfer them to online commercial banks for operations to meet the leverage ratio regulations, a structure financing analyst from a rating agency told Yicai Global.

Commercial banks and licensed consumer finance companies are dominant initiating agencies in the ABS consumer loan market. Small loan companies lead the exchange market. Consumer finance ABS products have become the top ones on Chinese stock exchanges.