The Chinese central government hopes to drive the conversion of P2P lenders into micro-loan companies.
Zhu Shumin (祝树民), vice-chair of the China Banking and Insurance Regulatory Commission (CBIRC), said that CBIRC and the People’s Bank of China (PBOC) are currently researching and drafting a plan for the conversion of P2P online lending organisations into micro-loan companies.
Zhu made the remarks on 21 October at a press conference held by China’s State News Office on the banking and insurance sectors.
A crackdown on P2P lending in China has led to a sharp drop in activity in the sector.
According to Zhu as of the end of September the lending balance of China’s 462 active online lenders had fallen 48% compared to the start of the year.
The number of lenders had plunged by 53% while the number of borrower has dropped 35%.
Since the start of the year over 1,200 online lenders have closed, with the majority voluntarily suspending operations, and a large number of P2P platforms currently making preparations for benign withdrawals.