China’s ongoing crackdown on risk in relation to internet finance could lead to a plunge in the number of active P2P lending platforms in 2019.
Shanghai’s Yingcan Group expects the woes of the P2P lending sector to persist in 2019, following a drop in the number of operators by over 50%in 2018 to 1021, and entrance of no new players since August.
According to a report from Bloomberg Yingcan forecasts that the number of Chinese P2P platforms is on track drop by another 70% in 2019 to as few as 300 companies by the end of the year, as regulators ratchet up their scrutiny due to mounting risk concerns.
Softbank-backed Yidai recently became the latest online lending platform to shut operations, stating that it would repay an outstanding principal balance of 4 billion yuan to around 32,000 lenders within a five year period.
Yidai said that a wave of panic amongst individual lenders prompted defaults and a contraction in transaction values, with a number of its senior executives now barred from leaving China.
The P2P Eye 2018 Internet Finance Annual Report” (网贷天眼2018互联网金融年报) released on 21 December indicates that the transaction volume for China’s P2P sector in 2018 was 1.92 trillion yuan, snapping a five year run of successive increases with a 21.19% plunge.
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