China Caps Borrowing Costs Charged by Micro-Loan Companies

China has imposed a hard cap on borrowing costs charged by micro-loan companies, finalizing long-anticipated rules that are expected to reshape the sector and accelerate the exit of weaker players.

The move targets China’s high-cost lending market, where micro-loan companies have long charged elevated rates to borrowers outside the traditional banking system. Regulators aim to curb excessive borrowing costs while containing financial risks.