Regulations for P2P industry coming
Print Edition
CHINA’S financial regulators have drafted rules for the growing peer-to-peer lending industry as they aim to regulate the sector.
The China Banking Regulatory Commission, which oversees the sector, also invited experts to review the draft rules which are expected to be unveiled at the end of June.
According to a report in the Southern Metropolis Daily yesterday, regulators plan to set 30 million yuan (US$4.83 million) as registered capital as one of the criteria for market access.
Zhu Chunming, secretary-general of Guangdong Internet Financial Association, who was one of the experts invited, confirmed the regulations had been drafted by the Financial Inclusion Affairs Department at the CBRC, but refused to comment on any specific criteria.
“There was a consensus among the experts that the planned regulation should protect the industry rather than kill it,” Zhu told Shanghai Daily yesterday. “The agenda has been set to launch the regulation. We expect to see that in the first half of the year.”
According to Zhu, local Internet financial association and finance office representatives from Shanghai, Beijing, Guangzhou and Hangzhou participated in the meeting in Beijing on March 11.
There have been concerns over rising default risks in the P2P lending platforms, that allow individuals to borrow money from other individuals without going through banks.
The sector accelerated to 252.8 billion yuan last year.
An estimated 275 platforms reported defaults or had difficulties withdrawing cash, while 41 percent of them turned out to be fraud platforms, according to a data compiled by Online Lending House, a website that tracks the sector.
“Leverage management is the proper approach to clean up the fraud platforms,” Shi Pengfeng, the chief executive officer of Online Lending House, said in a statement yesterday.
“But it’s difficult to set a specific criteria since we should also pay attention to other indexes such as risk control or business stability.”
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