(Yicai Global) April 9 -- Ping An Consumer Finance, a new unit of Chinese financial giant Ping An Insurance Group, today received regulatory approval to open after four months getting ready. Lufax, a fintech leader also under Ping An Insurance, has a 70 percent indirect stake.

The new firm has a registered capital of CNY5 billion (USD707.6 million) which is second only to Home Credit Consumer Finance’s CNY7 billion among all the licensed consumer finance companies to have opened in China.

Shenzhen-based Ping An Insurance has a 30 percent stake in the unit, with Lufax affiliates Harmonious Splendor, Weikun Shanghai Technology Services, and Jinjiong Shenzhen Technology Services, holding 28 percent, 27 percent and 15 percent, respectively.

Ping An Consumer Finance aims to become China’s leading fintech-based consumer finance provider, with profits mainly derived from margin interest, its parent company said on Nov. 21.

The firm has secured the regulator’s signoff to extend consumer loans to individuals, lend money to Chinese financial institutions, sell consumer loan-related insurance products as proxy and provide consultations and agent services on fixed income securities.

Ping An Consumer Finance will clear policy hurdles for Lufax’s initial public offering and open the market for new businesses, Shanghai Securities News reported, citing an industry insider.

Outstanding loans under Lufax’s management totaled CNY462.2 billion (USD65.4 billion) as of the end of December, soaring 23.3 percent from early last year, and the number of registered users on the platform reached 44 million, up 9.1 percent.

Editor: Peter Thomas