Stricter requirements may leave just 100 surviving players out of over 1,000.
China will start a trial registration process for P2P players in pilot cities by the second half of the year in another blow to the sector that has been caving under intense scrutiny from the country’s regulators, according to state-run newspaper Economic Information Daily cited by South China Morning Post.
The programme aims to clarify details of registration threshold and business boundaries of the players that will either identify them as national or regional platforms. Moreover, P2P lenders will be required to set aside general risk reserves and loan loss provision for lenders on their respective platforms.
“Nearly 90% of all remaining platforms will not qualify for a license,” Xue Hongyan, director of internet finance research centre at Suning Institute of oFinance was quoted in a note. A number of notable P2P lending collapses include that of Tuandai.com and Hongling Capital.
There are 1,018 operational P2P platforms as of January 2019, down 53.6% from 2,194 in the previous year, according to a report from Fitch Solutions. The number of active P2P investors also crashed 45.2% to to 2.3 million in January 2019 as the ongoing shadow banking crackdown continues to cull dodgy financial activities.
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