China’s internet-based consumer finance market is facing both opportunities and challenges as more e-commerce companies, online shopping platforms, and peer-to-peer lending platforms enter the market.

Different from traditional financial institutions, who tend to prefer large loans, these new players aim to provide consumers small loans for daily use. The credit limit is generally under 200,000 yuan ($29,700) with a repayment period of up to a year.

For example, the lending quota of Ant Cash Now, a consumer loan service provided by Alibaba Group’s Ant Financial, ranges from 1,000 yuan to 300,000 yuan, with a daily interest rate of 0.02 percent to 0. 05 percent.

Such lending models have kept the money rolling in. According to data, Ant Cash Now earned a net income of 6.1 billion yuan in 2017 alone.

Though useful in extending financial applications to the public over the internet or any other IP network, associated companies still face some challenges in terms of long-term development.

In the early stages, many online platforms recklessly lowered their standard of risk management and cooperated with certain unqualified companies, which lead to collapse rather than expansion.

As China noted the issue and tightened regulation concerning the Internet-based consumer finance market, some other platforms still need to overhaul or even cut down their business.

Apart from vicious market competition, the limited access to credit information of individual borrowers remains a significant barrier.

“Though some organizations have connected with Baihang Credit (China’s only licensed market-based personal credit agency), there is still room for improvement in sharing personal credit history,” said a source in charge of an installment payment platform.