Chinese Police Snatch Back 80 Billion Yuan From Disgraced P2P Platforms
Chinese police have so far recovered more than 80 billion yuan ($12.3 billion) in assets related to online peer-to-peer (P2P) lending platforms, the China Banking and Insurance Regulatory Commission (CBIRC), the country’s banking watchdog, said (link in Chinese) Friday.
The disclosure is the latest update in a four-year crackdown on China’s scandal-ridden P2P lending industry. In August, CBIRC Chairman Guo Shuqing said investors held more than 800 billion yuan in unpaid debts from P2P platforms.
Last month, a deputy governor of the People’s Bank of China said (link in Chinese) all of the country’s P2P platforms had been essentially shut down. At its peak in November 2015, the sector had more than 3,600 functioning platforms.
The Chinese government used to encourage the development of the online P2P industry, viewing the platforms, which match individual borrowers and lenders with no input from banks, as an innovative way to expand financial services to small-scale debtors.
But officials launched a crackdown in 2016 after lax supervision and a string of fraud cases battered the industry’s reputation and sparked the collapse of hundreds of platforms.
The CBIRC said Friday it would strictly ban new P2P business and urge related companies to draft repayment plans. It will also support the companies in their efforts to move into other sectors or seek help from local state-owned asset managers in order to repay debts.
Some former P2P platforms are transforming into licensed online microlenders or third-party platforms — also known as loan-facilitating institutions — that help financial institutions issue loans. Such platforms include those operated by Nasdaq-listed LexinFintech Holdings Ltd. and New York-listed Qudian Inc.
Denise Jia contributed to this report.
Contact reporter Tang Ziyi (firstname.lastname@example.org) and editor Matthew Walsh (email@example.com)
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