New P2P Lending Platforms in China Drop 90% in First Half of 2018


China’s P2P lending sector has seen a sharp contraction since the launch of a crackdown on the sector by the Chinese central bank in 2017.

As of the end of the first half of 2018 there were a total of 1504 regularly operating platforms in China’s P2P lending sector out of 5983 platforms monitored by Lingyi Zhiku (零壹智库), for a YoY decline of 25.2%.

The figure marks a sharp decline in the number of P2P platforms operating in China compared to a peak of more than 6000.

A total of 359 platforms suffered from “problems” in the first half, for a slight year-on-year decline, but an increase of 16.6% compared to the preceding period. These problems include withdrawal difficulties, “absconding,” as well as closures of websites without reason.

Only 15 new P2P lending platforms came online in the first half of 2018, for a plunge of 89.9% compared to the same period last year and 82.4% compared to the preceding period.

The total value of P2P lending transactions was 1.05 trillion yuan in the first half, for a YoY decline of 18.7%, and a decline of 26.7% compared to the second half of 2017.

As of the end of the first half of 2018, the outstanding P2P loan balance was 961 billion yuan, for a YoY drop of 16.8% and a decline of 1.4% compared to preceding period, as well as the 9th consecutive month of decline.

The waning performance of China’s P2P lending sector arrives in the wake of a crackdown on internet finance launched by Beijing in 2017.

At the start of 2017 the People’s Bank of China released the “Notice Concerning Further Performing Specialist Clean-up and Rectification Work in Relation to Internet Financial Risk” (关于进一步做好互联网金融风险专项整治清理整顿工作的通知), which called for local authorities to “adopt effective measures to ensure that online finance entities decline in both number and business scope during the rectification period.”