China’s 280 online microloan companies are expected to soon come under unified administrative regulation according to domestic media reports.
According to a report from 21st Century Business Herald Chinese regulators are currently working on new administrative measures for online microloan companies which are expected to have a major impact upon the sector.
The report highlights five key focal points for the new regulation as anticipated by members of industry:
- Companies with paid-up registered capital of 500 million yuan, and a leverage multiple of 3 – 5;
- Where borrowers are natural persons, a ceiling on individual loans of 200,000 – 300,000 yuan, and a ceiling of 1 million yuan for enterprise borrowers;
- A prohibition on offline lending.
- Integration with the Chinese central bank’s credit system within a two year period.
Data from 01Caijing indicates that as of 30 June 2018 China was host to a total of 280 online microloan companies, of which 93 had registered capital of 500 million yuan or more.
64 of these companies are situated in Guangdong province, while 55 are in Chongqing, 23 are in Zhejiang province, 22 are in Jiangxi province, 16 are in Jiangsu province and 16 in Shanghai.
Hainan province is host to 12 platforms, Heilongjiang province 11 platforms, while nine are in Liaoning, eight in Shaanxi and six in Shanxi province.
Anhui, Beijing, Hunan and Sichuan are each host to four online microloan companies, Inner Mongolia and Ningxia are home to three a piece, and Fujian has two.
Guizhou, Hebei, Tianjin, Tibet and Xinjiang are each home to one online microloan company.