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P2P lending market continues shakeup, loses 314 firms in 7 months

By Shi Jing (People's Daily Online)    17:16, August 22, 2016
P2P lending market continues shakeup, loses 314 firms in 7 months

Since the release of the Interim Measures for Supervision on P2P Industry in December 2015, the P2P lending market has been experiencing an ongoing upset, decreasing from 2,529 lenders in 2015 to 2,281 in July 2016, according to local consulting firm Yingcan Consulting. 

“This decrease has many causes,” an insider explained. “First, the release of the new measures last year put pressure on unlawful platforms; second, after the exposure of scandals within some P2P firms, many investors are cautious about injecting more capital, which means that some small-scale firms have been forced to leave the market; third, the government has overhauled the market in the first half of this year, squeezing out all unqualified companies.”

Although many insiders have left the market in the wake of the newly imposed measures, outsiders are still coming in. In the past seven months, an average of 43 firms have entered the P2P lending market monthly, and many of the newcomers are from traditional industries. A few examples include Evergrande Real Estate, Sunshine Insurance Group and more. Compared to other participants, these tycoons are usually ample in capital and possess a vast database of potential customers.

Chen Xiaojun, a researcher of the P2P industry, believes that the industry shakeup has actually had minimal impact on major platforms, only influencing some unlawful and unqualified firms. At this critical juncture, investors give more weight to secure companies with good records, which provides an opening for these traditional companies. According to Chen, the present stage can be regarded as a kind of natural selection process.

P2P platform refers to peer-to-peer platform which provides loan service for members who register on their platform and sometimes charges fees.

(For the latest China news, Please follow People's Daily on Twitter and Facebook)(Editor: Shi Jing,Bianji)

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