Cookies on Pinsent Masons website

This website uses cookies to allow us to see how the site is used. The cookies cannot identify you. If you continue to use this site we will assume that you are happy with this

If you want to use the sites without cookies or would like to know more, you can do that here.

New P2P platforms slow to emerge in China due to regulations, says agency

Stricter rules on peer to peer (P2P) lending are slowing the launch of new P2P platforms in China, Chinese state-owned news agency Xinhua has reported.14 Apr 2016

Only four P2P firms set up in China last month, and the total number of platforms has fallen for  four consecutive months to 2,572 in March, Xinhua said, citing a financial information aggregator called Yinhang.com.

Tighter regulation on the release of information and on illegal finance have hit the industry, making it harder for new lenders to open for business and forcing established lenders to change their practices, Yinhang.com analyst Li Xianrui told Xinhua.

The rules were changed in response to the discovery of Ponzi schemes in several Chinese P2P brokers earlier this year, and the potential systemic risk that this brought, Xinhua said.

Regulators identified problems with 112 platforms in March, a 40% rise from the previous month, Xinhua said.

Yinhang.com's statistics also showed the average annual rate of return for lenders slipped 32 basis points to 10.6% in March as investors become more cautious, the news site said.

"The unqualified will struggle to survive and may even have to exit the market," Li said.