Category Archives: Credit Research

Research Report:Sesame (Zhima) Score: ‘Social Credit Score’ or FICO-like Credit Score?

Xinhai Liu; Ruowen Xu


At the beginning of 2015, Sesame score was born out of the finance department of the Alibaba Group, now named Ant Finance. Sesame score was introduced to Chinese consumers as the first public credit score in China and was soon brought into widespread use. Sesame score examines consumers’ creditworthiness based on one’s personal characteristics, credit history, contract performance, and social network and behavioural preferences, by incorporating proprietary big data that goes beyond mere financial aspects.

During recent years, the construction of a social credit score in China has caught the attention of the media across the globe. However, it is rather confusing to distinguish between the three main types of consumer scores: Sesame score, Social credit score, and FICO-like credit score. In this paper, we will explore the differences between these three types of consumer scores.

Delving into the mechanism of Sesame score, this research will explore in detail how it operates and analyses how it differs from a traditional credit score. In addition, we will investigate the applications and performance of Sesame score, as the score is widely used by digital vendors to provide and tailor daily services to consumers, enabling ‘use first and pay later’ or ‘borrow items without deposit’ features. Sesame score has accelerated the boom of the sharing economy in China.

Moreover, Sesame score has been recognized as a tool for risk controlling i.e. the safeguarding of Internet finance, given that the national credit bureau (Credit Reference Center) is not open to non-regulated Internet finance platforms whose credit applicants usually lack of credit history. Meanwhile, various Internet finance platforms and digital vendors have found Sesame score useful. It is worthwhile to look at how Sesame score meets the Chinese risk appetite and how the market has come to recognize the reliability of such a score. This paper also evaluates Sesame score approach to risk controls.

The wide application of Sesame score in non-loan fields has caused controversy, related to issues of consumer privacy and use in marketing. This year, due to the regulation from the People’s Bank of China, Ant Finance announced that it had stopped its business activities regarding the application of Sesame score in the finance field; now one must ask: what is the next step for Sesame credit score? This paper discusses the future of Sesame score with special consideration being given to the concepts ‘all data is credit data’ and ‘all service is becoming credit service’.

Key words: Sesame score, Credit score, Social credit score, Internet finance

Note: The report was original published in Credit Scoring and Credit Control Conference XVI,2019-08-29, Edinburg,U,K

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Research Report: Development of Personal (Consumer) Credit Reporting Requires Market Force in China

Xinhai Liu


Consumer credit reporting[1]is an important infrastructure for consumer finance and digital economy. As a product of the market economy, it is self-evident how important the credit reporting system is for the healthy growth of an economy and the stable operation of a financial market.

China’s consumer credit reporting did not start until the beginning of the century which was relatively late. However, as China emerges to be the world’s second largest economy, its domestic consumer finance became increasingly popular, and its credit market expanded. Consequently its consumer credit reporting agencies gradually attracted increasing attention. The central bank’s consumer credit reporting is efficient and highly capable of collecting data, however it mainly focuses on providing basic services. To provide services to the internet finance[2]sector, private credit reporting agencies, such as the Sesame Credit, ran their own trials to ‘test the water’. Such trials caused a lot of controversy whilst agitating the market. In addition, Baihang Credit, established at the beginning of 2018 by eight private credit reporting agencies as well as The National Internet Finance Association of China (NIFA), under the supervision and guidance of the Chinese central bank, being the People’s Bank of China (PBoC), have received attentions from all circles of society. 

The development of China’s credit reporting is different from that of developed European countries and the US, as in China it grew with the rise of the digital economy, consequently the involvement of many big data companies and internet companies drove the development with data and technology. The development of Chinese consumer credit reporting is also closely associated with the construction of a social credit system with Chinese characteristics. Meanwhile, China’s consumer credit reporting faces challenges, as the regulations on protecting personal information tightens globally, the development of a credit reporting market is influenced. This paper believes that the future development of China’s consumer credit reporting depends on the strength of market forces, after carefully examine the current complex and changing status of the Chinese consumer credit reporting, based on the circumstances.

Key words:Consumer Credit Reporting,Credit Score,  PBoC,  Sesame Credit, Baihang Credit 

Note: The original Chinese report  was  published in China Reform, 2019 (5), pp. 60-66.(

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Author Bio

Dr. Xinhai Liu is the  Deputy Director-General at the Professional Committee of Credit Management (PCCM), China Mergers & Acquisitions Association (CMAA). He is also a part-time researcher at the Center of Finance Intelligence Research, Peking University. 

Dr. Xinhai Liu is heavily involved in the R&D of Fintech, his focus covers policy, industry front and application algorithm. His book Credit Information Service and Big Data was published by the CITIC Press, a renowned publishing house in China. Dr. Liu is currently working on financial network analysis, alternative data based credit scoring, the application of AI and big data in finance. Meanwhile Dr. Liu owns several patents with his team on Fintech and AI.

Dr. Xinhai Liu obtained his PhD from the Katholieke Universiteit Leuven (K.U. Leuven) in 2011. After working in Belgium, Dr. Xinhai Liu worked in the Credit Reference Center at the People’s Bank of China as an associate researcher on credit risk management, where he conducted financial researches. He was a visiting scholar to the London School of Economics and Political Science (LSE).

Dr. Xinhai Liu has published academic papers in the world-level journals such as IEEE TKDE and IEEE PAMI and hosted several national research fundings on finance data analysis. 

[1]The international term for personal credit system is consumer credit system, however in China it is called personal credit system, therefore in the Chinese text personal credit system is used.  

[2]Internet finance is a new type of financial business model with which traditional financial institutions and internet companies conduct financing, payment, investment, and information intermediary services usingthe internet and information & communication technology.The term is quite popular in China in recent years, a typical product is P2P online lending. However, it has been replaced by a new word FinTech. (Xie, P., Zou, C. and Liu, H.(2020) Internet Finance in China: Introduction and Practical Approaches, Routledge)