The National Internet Finance Association of China (NIFA) (中国互金协会) has launched a new measure to raise the transparency of the online lending sector.
On 11 September NIFA issued a notice to all member institutions requiring the disclosure and clear notification of comprehensive annualised costs for all online loans, as part of efforts to further strengthen protections of the rights and interests of finance consumers.
Starting from October NIFA will conduct sample inspections of disclosures and notifications by member institutions and apply disciplinary measures to those that refuse to comply with requirements, as well as request that regulators handle matters in accordance with law.
A NIFA representative said to the Xinhua News Agency that many online lending institutions in China use confusing methods to advertise lending costs, by only providing information on daily interest rates, monthly interest rates or services fees, and that interest fees displayed are often inconsistent with actual lending costs.
NIFA’s latest notice also stressed the need for online lending institutions in China to fulfil their social responsibility of maintaining the lawful rights and interests of financial consumers, and achieve full transparency of loan interest rates and fees.