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

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.