Future Finance
China Has a New Plan for P2P Industry: Small-Time Lending
- Online lenders to transition to small-loan companies
- Even before latest move, fraud-riddled industry was on decline
Photographer: Greg Baker/AFP via Getty Images
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It was once a roughly $150 billion industry -- an innovative marketplace where individuals could lend to each other. But after years of fraud, defaults and few investor safeguards, China’s regulators are embarking on a plan to radically transform its peer-to-peer lenders.
Authorities in Beijing are working with local officials on guidelines that would convert qualified online lenders into small-loan companies, Zhu Shumin, vice chairman of the China Banking and Insurance Regulatory Commission, said Monday. Firms that don’t fulfill current requirements will be pushed to exit the industry, he said, without providing more details.