P2P boom has ended and will consolidate more - Sara Hsu

Sara Hsu

P2P lending used to be one of the darlings of the financial industry in China, but those days are over, describes financial analyst Sara Hsu in a thorough overview of the developments at SupChina. More consolidation of the industry is expected, she adds.

Sara Hsu:

In 2018, the growth of China’s peer-to-peer (P2P) lending sector dramatically reversed: 1,407 internet platforms that offered P2P lending services shut down due to increased regulation between July 2017 and June 2018. This year, the government has continued to lead a reorganization of the industry:

• More companies will die: As of February 17, only 60 percent of online lending institutions had disclosed their operational information for January 2019, including five problematic platforms.

• However, the current asset quality of the online lending industry has improved significantly according the data from firms that did report.

• As of the end of January 2019, the accumulated amount of the online P2P online loan industry was about 7.78 trillion yuan ($1.16 trillion). The total loan amount in January was 91.4 billion yuan ($13.61 billion), down 55.1 percent year-on-year and down 1.3 percent from the previous month.

• Further consolidation of industry players is certain. Some experts quoted in media reports predict that the scale of future online loans will continue to shrink because of regulation.

• Some listed companies, such as Aoma Electric and Panda Financial Companies, have abandoned their P2P businesses.

More at SupChina.

Sara Hsu is a speaker at the China Speakers Bureau. Do you need her at your meeting or conference? Do get in touch or fill in our speakers' request form.

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