China rolls out monopoly curbs, CIIE promotes cross-border trade: Retailheads, How a secret early Tiktok growth hack nearly backfired, Proudly powered by Newspack by Automattic. Learn more about how we use cookies in our cookie policy. China had merely 15 P2P lenders in operation at the end of August, down 99 percent from the start of 2019, Feng Yan, deputy director of the department of inclusive finance of the China Banking and Insurance Regulatory Commission, said at a press conference. China’s savers are rushing to pull money from peer-to-peer lending platforms, accelerating a contraction of the $195 billion industry and testing the government’s ability to maintain calm as it cracks down on risky shadow-banking activities. They’re all in jail now, but the poor investors only got 35% of their money back. In recent months, authorities have ramped up regulatory oversight of the world’s largest P2P lending industry. That uncertainty is reflected in the stock market, where P2P lenders have slumped and initial public offerings from the industry have dried up. Authorities have yet to publish the time frame for formally registering P2P firms, meaning the sector is operating in a kind of regulatory limbo, according to Macquarie Capital’s Hsu. “Allowing compliant P2P institutions to transform into online microlending companies marks the first time that authorities have allowed them to become credit intermediaries,” said Yin Zhentao, a researcher with the government-backed think tank Chinese Academy of Social Sciences. Last month, China Banking and Insurance Regulatory Commission Chairman Guo Shuqing warned that any savings or investment product with promised returns of more than 8 percent is likely to be “very dangerous” and that investors should be prepared to lose all their money if advertised returns exceed 10 percent. The U.S.-listed shares of PPDAI Group Inc. and Yirendai Ltd., among China’s biggest P2P lenders, have tumbled 38 percent and 53 percent this year, respectively. “I have to move on no matter how upset I am, but a lot of the other investors are old and are suffering more.”. China’s savers are rushing to pull money from peer-to-peer lending platforms. Chinese authorities have further tightened controls on the peer-to-peer (P2P) lending industry. Only a handful of the 2,000 or so remaining firms are likely to endure, he said. No major Chinese fintech companies have completed IPOs in 2018, despite plans by firms including 9F Group and Weidai Hangzhou Financial Information Service Co. to raise about $8 billion, according to data compiled by Bloomberg. At the end of last year, 2,667 P2P platforms had had difficulties meeting cash withdrawal demands, saw their owners abscond with investor funds, or were investigated by police, according to data (link in Chinese) compiled by P2P research platform Wangdaizhijia. China Rapid Finance Ltd. fell 7 percent on Monday, extending this year’s decline to 68 percent. While there’s little sign that the P2P turmoil has spread to systemically important wealth-management products issued by banks, much of China’s $10 trillion shadow-lending system faces the same headwinds of rising defaults, slowing economic growth and official calls to end to implicit guarantees on risky investments. About 220,000 investors are owed about 5 billion yuan. Updates number of troubled platforms in second paragraph. HomeEquity Sells $77 Million of Reverse Mortgages to Concent... Turkey Central Bank Chief Said to Promise Greater Visibility. The number of platforms under operation decreased to 1,039 in December from 2,191 in January 2018, with no new platforms opening in the last five months, the data showed. The turmoil is also hurting companies and individuals who have relied on P2P platforms for financing. In some cases, savers are turning up at the offices of P2P operators to demand repayment, spooked by reports of defaults, sudden closures and frozen funds. — With assistance by Jun Luo, Alfred Liu, and Crystal Tse. Yingcan Group, a Shanghai-based research firm, estimates that half of China’s online P2P platforms disappeared in 2018. Even for leading P2P players, a shrinking investor base, rising defaults and higher funding costs will pose “enormous challenges,” China International Capital Corp. analysts Yao Zeyu and Pu Han wrote in a July 13 report. Investors are losing confidence at their stakes and pulling their funds, diminishing operators’ liquidity; many of them are facing insolvency. The government introduced a complex registration process in December to clean up the sector, with officials in Shanghai identifying 160 problem areas such as overly high interest rates, misuse of funds and exaggerated return figures. “I won’t invest in P2P platforms any more, I no longer trust them,” said Gao, who had been putting money into online loans for about four years. Get instant access to all our premium content, archives, newsletters, and online community. No one embraced it more than China, which boasts the world's largest P2P lending sector. , once China’s biggest P2P lending platform, folded in 2016 having collected 59.8 billion yuan (US$8.5 billion) from more than 900,000 investors. Before it's here, it's on the Bloomberg Terminal. Microlenders need to obtain licenses from the regulators and meet certain minimal capital requirements. Philip Lagerkranser reports. The average yield on P2P loans was 10.2 percent in the first half, official figures show. Photo: IC, Chinese Chipmaker SMIC Sees Record Profits Despite U.S. Pressure, Trending in China: Singer Terry Lin and High School Show the Best Things in Life Are Free on Double 11, Alibaba and JD.com Make Record ‘Double Eleven’ Sales as Government Combats Internet Monopolies, Major Chinese State-Owned Bank Uses Blockchain to Sell $3 Billion of Bonds, Battered by U.S. Sanctions, Huawei Looks to Sell Budget Smartphone Unit, China Wants Self-Driving Tech in Half of New Cars by 2025, Trending in China: Chinese Youth Turn Bragging About Their Wealth into a New Artform, Rihanna and Justin Bieber Help Tencent Music's Profits Reach Higher Notes, TikTok Focuses on User Trust Creating 200 New Jobs in Ireland, Taiwan’s MediaTek Launches New 5G Mobile Chip, China's Luxshare aims to begin iPhone assembly ahead of schedule, TikTok and Sister App Douyin Retain Crown as World’s Most Downloaded Non-Game App, Trending in China: Take a Vacation, Whether You Want to or Not - It’s the Law, Shanghai-Listed Cable Maker Plans to Buy Into Luo Yonghao-Linked Livestreaming E-Commerce Firm, Local Governments Near Completion of Annual Special Bond Borrowing, China’s 3-Year Crackdown Leaves Just Three P2P Lenders Standing, Bank Bailouts Must Be ‘Market-Oriented,’ Central Bank Says, American Chamber of Commerce in Hong Kong Sells Headquarters, Gallery: China ‘Double 11’ Buyers, You’ve Got Mail, Power To The People: Pintec Serves A Booming Consumer Class, Largest hotel group in Europe accepts UnionPay, UnionPay mobile QuickPass debuts in Hong Kong, UnionPay International launches premium catering privilege U Dining Collection, UnionPay International’s U Plan has covered over 1600 stores overseas.