Chinese financial regulators have given signs that they will further intensify their crackdown on the online micro-lending sector, just after calling for the immediate suspension of all further approvals for new platforms.
21st Century Business Herald reports that the Chinese central bank and the China Banking Regulatory Commission have convened a meeting of senior officials from the country’s regional financial affairs offices, to discuss measures to clean up the micro-lending sector.
The move comes just after Beijing announced the immediate suspension of all approvals for the establishment of new online micro-lending platforms, following reports that many were charging exorbitant interest rates or operating in breach of licensing requirements.
According to 21st Century the latest meeting on micro-lending will include representatives from the financial affairs offices of a total of 17 of China’s province-level political entities where online micro-lending platforms are in operation, including Anhui, Chongqing, Guangdong, Jiangxi, Ningxia, Tibet and Zhejiang.
The representatives will be required to provide reports on local approvals of online micro-lending entities, as well as regulatory arrangements.
Rumours have long circulated that Chinese regulators planned to launch a crackdown on Internet micro-lending, hampering the state-side IPO’s of Fintech concerns such as PPDAI Group.
As early as February of this year Li Junfeng (李均锋), chair of the Financial Inclusion Office of the China Banking Regulatory Commission, warned of the risk associated with online cross-regional micro-loan operations.
At a meeting of the China Micro-lending Company Association (中国小额贷款公司协会) held on 22 February, Li said that CBRC was researching guidance opinions in relation to online micro-loans, and called for local regulators to exercise greater prudence in the dispensation of approvals.
According to 21st Century Business Herald, while most regional regulators subsequently stepped up their scrutiny of online micro-lending, some sought to attract investment and engage in “regulatory arbitrage” by loosening requirements and hastening to approve micro-lending companies prior to the release of national guidance opinions.