Online Lending Platforms in China Fall Below 1000, Drop 60% Compared to 2016 Peak

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The number of online lending platforms operating in China on a regular basis has seen a precipitous decline compared to its peak, falling below the 1000-platform threshold for the first time.

The latest data released by the Rong360 Big Data Research Institute (360大数据研究院) indicates that as of April this year there were a total of 998 of normally operating online lending platforms in operation throughout China, following an increase in the number of “problem” platforms of 49.

Total online loan platform transactions were 68.59 billion yuan in April, for a decline of 17.14% compared to the previous month, while as of the end of April the outstanding balance for platforms was 632.899 billion yuan, for an on-month fall of 2.25%.

Active lenders and borrowers numbered 3.0975 million and 5.1357 million respectively, for declines of 7.08% and 12.11% respectively compared to the preceding month.

At the industry’s peak in 2016 the number of normally operating platforms in China’s online lending sector hit 2603, with the current number representing a drop of over 60%.

Ai Yawen (艾亚文), Rong360 Big Data Research Institute analyst, said that problem online lending platforms continue shut down following efforts by regulators to clean up the industry.

At the start of 2019 Chinese regulators issued the “Opinions Concerning Properly Performing Categorised Disposal and Risk Prevention Work for Online Lending Institutions” (关于做好网贷机构分类处置和风险防范工作的意见) (Directive no. 175).

The Opinions called for the “firm guidance of the risk-free withdrawal of smaller scale institutions, the guidance of zombie-category institutions to withdraw as soon as possible, and the guidance of high-risk institutions to work hard to achieve benign withdrawals.”

The Opinion also called for “actively guiding some institutions to convert into micro-loan online companies, loan assistance institutions, or licensed asset management institutions.”

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