On May 26, the National Financial Regulatory Administration officially approved the renaming of "Home Credit Consumer Finance Co., Ltd." to "Tianjin JD Consumer Finance Co., Ltd." This marks the complete exit of Home Credit from China. While JD.com has secured a valuable consumer finance license, it also inherits a heavy burden of historical issues affecting millions of borrowers.

**1. Home Credit Leaves Behind a Financial Mess** In 2010, Home Credit became China's first wholly foreign-owned consumer finance company. Leveraging mobile phones and 3C products as entry points, along with an army of millions of ground promoters, it quickly dominated the installment loan market. Over the following years, its revenue grew by nearly RMB 10 billion annually. From 2016 to 2019, it maintained its position as the top player in revenue and credit scale, becoming the first licensed consumer finance firm with assets exceeding RMB 100 billion.

In 2019, Home Credit passed the Hong Kong Stock Exchange hearing, coming within a step of listing. Its prospectus revealed around 50 million users in China, with total outstanding loans of €12.447 billion (approximately RMB 96.068 billion). Reports at the time indicated it had 58,000 employees and 213,000 promoters spread across 240,000 sales outlets in 300 cities, forming a vast network targeting low-income groups.

However, as its customer base expanded exponentially, its non-performing loan (NPL) ratio surged, reaching 9.6% by the end of 2019—far above the industry average of 2.63%. By 2020, Home Credit's operations took a sharp downturn. In 2021, the death of its founder in a helicopter crash became the final straw. The company sought to exit but struggled to offload its massive bad debt.

In the first half of 2021, Home Credit sold asset packages worth RMB 10.8 billion, with Zhejiang Merchants Asset Management acquiring RMB 8.6 billion and Ping An Puhui taking RMB 2.2 billion. In May 2024, it transferred a RMB 26.5 billion package to Ruijing Asset. By November 2024, it had sold smaller packages, mostly to Ruijing. Since 2021, over RMB 40 billion in bad assets have been publicly disclosed as transferred.

That same year, JD.com, ultimately controlled by Richard Liu, invested RMB 3.25 billion to acquire a 65% stake in Home Credit, becoming its new owner.

**2. Millions of Borrowers Face Confusion and High-Interest Loans on Credit Reports** In 2024, Home Credit officially announced its exit from China, with its business acquired and rebranded. But for many borrowers, the real trouble was just beginning. Some found "asset transfer" records inexplicably added to their credit reports, raising concerns about mortgage approvals. Others sought refunds for interest exceeding the 24% annualized cap, only to be told by the new entity that these were "historical issues" beyond their responsibility. Attempts to contact Home Credit went unanswered.

Some borrowers speculated whether debts could be wiped clean after the rebranding. However, JD Consumer Finance clarified in May that the name change would not affect existing contracts or credit obligations. Industry experts confirmed that debt validity remains unchanged, and defaults will continue to impact credit scores.

Home Credit's high-interest loans also pose a major issue. Reports indicated some loans, after deducting upfront fees, carried effective annualized rates of 39.1%, far exceeding regulatory limits. One borrower reported repaying over RMB 120,000 on a RMB 60,000 loan, with no recourse for refunds under the new management.

Many borrowers now question whether JD Consumer Finance should assume liability for excess interest paid under Home Credit's "predatory" schemes. Beyond financial losses, thousands have demanded the removal of these high-interest loan records from their credit reports, arguing they legally constitute usury.

**3. JD Consumer Finance's Major Challenge** At the time of transfer, Home Credit's net equity stood at RMB 800 million, with a pre-tax loss of RMB 4.265 billion in 2023—its first disclosed operational data in years. JD.com aims to bolster its consumer finance arm in a fiercely competitive market dominated by banks, licensed firms, and internet giants like Ant Group’s consumer finance unit.

Beyond the license, restructuring Home Credit tests JD’s ability to handle distressed assets. Integrating Home Credit’s teams, systems, and legacy issues presents a formidable challenge.

In the distressed asset sector, Alibaba has led with early moves into "internet + NPL" solutions. In 2012, Alibaba conducted China’s first online judicial auction. By 2015, major asset management companies (AMCs) like China Cinda and China Huarong partnered with Taobao for online disposals. By 2017, all four state-owned AMCs had joined Alibaba’s platform, alongside over 500 financial institutions.

JD entered judicial auctions in late 2016 but lagged in scaling up. While Alibaba expanded into local AMC stakes—such as acquiring Jiangxi Ruijing Asset in 2017—JD took a 15% stake in Beijing Asset in 2019, marking its sole foray into AMC investments.

The road ahead for JD Consumer Finance hinges on resolving Home Credit’s tangled legacy while navigating an increasingly crowded market.