China Shadow Bankers Go Online as Peer-to-Peer Sites Boom

Jack Qiu, spending evenings in front of his laptop in the southern Chinese city of Guangzhou, is earning the best returns of his life: 14.2 percent on an annualized basis in just two months.

He’s doing it by lending money to strangers online. An accountant by day, Qiu has turned out to be a better loan manager by night than most banks. Only two investments out of his 80,000 yuan ($12,525) total, each worth 100 yuan, have gone unpaid. Nonperforming loans at a Chinese lender, on average, would be almost four times as much.