China-based Ant Group is looking to set up a consumer finance company in south-western China, Reuters reported citing an undisclosed source.

The plan is said to be part of the company’s strategy to grow business in the domestic market ahead of the proposed IPO.

Ant Group, in which Alibaba Group holds a 33% stake, has already secured payments, banking, insurance, and micro-lending licenses in the country.

It plans to partner with Nanyang Commercial Bank (NCB) and Alibaba’s China TransInfo Technology (CTT) to form the new firm, the report added.

If the plan materializes, Ant will own a 50% stake in the new firm, NCB will own 15%, and TransInfo will own a 10% stake.

Other stakeholders include battery maker Contemporary Amperex Technology (CATL).

Reuters report added that these founders will collectively invest nearly CNY8bn ($1.2bn) in the new company.

They are expected to sign the agreement later this week.

The consumer finance firm is expected to start operating in the fourth quarter of 2020.

For Ant, the new entity will be its third micro-lending establishment in the country – which will have a lending capacity of 10 times its registered capital.

Additionally, the Group said that it has begun dual listing in Hong Kong and Shanghai, from which, the company plans to raise more than $20bn.

The decision to form a consumer financial firm comes after other Chinese tech giants like Tencent and ByteDance are pushing to bulk up their finances in their home country.