China’s P2P lending platforms have seen a surge in closures since the start of 2019 as local regulators step up their pressure on the sector.
Figures from Wangdai Zhijia (网贷之家) indicate that as of 24 April 2019 at least 45 P2P platforms in China had been forced by local authorities to withdraw or change their business models.
The closure of P2P platforms has accelerated considerably since the start of the year, with 32 platform withdrawals in 2019, accounting for 71% of the total.
Wangdai Zhijia data indicates that most of these platforms are concentrated in the province-level administrative entities of Guangdong, Shanghai, Zhejiang, Shandong, Guangxi, Yunnan and Hebei.
According to a report from Securities Daily eight of these P2P platforms have “successfully completed repayments” or “settled all outstanding items.”
Six platforms have been placed under investigation by Chinese law enforcement after announcing benign withdrawals, including Yigang Finance (易港金融), Minmin Dai (民民贷), Jinman Ying (金满赢), Yu Caiyuan (予财缘), You Caiqi (有财气) and Shunxin Licai (顺心理财).
Figures from the Rong360 Big Data Research Institute (据融360大数据研究院) indicates that as of the end of March 2019 China was host to a total of 1047 regularly operating online lending platforms, of which at least 300 had registered funds of less than 50 million yuan, and 245 had outstanding balances of less than 100 million yuan.
China’s regional authorities stepped up the pressure on the online lending sector in 2018, with 12 provincial and municipal governments issuing P2P platform withdrawal guidance directives last year starting with the Guangdong province city of Shenzhen in March.