China Cracks Down on “Harvesting” of College Student Consumer Loans by Online Finance Platforms


The Chinese central government has just issued a new directive aimed at curbing online consumer lending activities that specifically target college students.

The China Banking and Insurance Regulatory Commission (CBIRC) and the Chinese central bank recently led the launch of the “Notice Concerning Further Standardising Supervisory and Regulatory Work for University Student Online Consumer Loans” (关于进一步规范大学生互联网消费贷款监督管理工作的通知).

A CBIRC official said that the Notice focuses in particular upon online consumer finance activities that specifically target college students, and “firmly containing the targeted ‘harvesting’ of college students by Internet platforms.”

The Notice forbids micro-loan companies from providing online consumer loans to university students, as well as other institutions providing lending services to them unless they have been established with the approval of regulatory authorities.

The Notice also strengthens risk regulation of consumer finance companies, commercial banks and other licensed financial institutions in China when it comes to consumer lending operations for college students.

Under the Notice Chinese banks will not be permitted to make loans to college students unless they agree to submitting their online consumer finance records to credit information databases.

The move comes after a surge in consumer lending and related advertising targeting Chinese college students over the past several years, especially by new entrants to the sector such as micro-loan companies and consumer finance vehicles.