One of China’s leading P2P lenders has blamed lack of regulatory clarity from the central government for its poor performance.
Reports emerged at the start of March that Shanghai-based Dianrong is closing 60 of its 90 offline stores as well as retrenching around 2,000 staff.
Internal figures from the company itself point to a fall in its outstanding transaction volume to 10 billion from 14 billion yuan at a peak reached in the wake of rapid expansion from 2017 – 2018.
One of Dianrong’s co-founders has blamed its recent ailing performance on the Chinese government’s crackdown on the P2P lending sector, as well as lack of clarity as to its long-term policy intentions.
“Some people wonder why Dianrong’s growth has slowed in the past two years. It was not because we did not want to or could not grow. It was because we were told not to grow,” said Guo Yuhang in an internal memo according to a report from Reuters.
“While the industry has expanded quickly to a large and complex scale over the years, regulatory directions keep changing and different regions have different rules…We hope regulators can give the industry a clear, and definite timetable, and give guidance and a ray of hope for companies that stick to compliance.”
The Chinese government launched a heavy handed crackdown on the P2P lending sector last year that led to a plunge in the number of platforms in regular operation, with analysts expecting this number to drop to as low as 300 by the end of 2019.