Monthly Transactions Below USD30 Billion for Three Straight Months in China Portend Peril for P2P Lenders
Yin Yi
/SOURCE : Yicai
Monthly Transactions Below USD30 Billion for Three Straight Months in China Portend Peril for P2P Lenders

(Yicai Global) Sept. 04 -- As regulation stiffens, China's emerging online lending industry is also facing huge pressure from operations.

The monthly transaction volume of China's online lending business has decreased for three consecutive months and declined below USD30 billion (CNY200) billion last month, the latest industry data show.

The peer-to-peer (P2P) online lending industry logged a transaction volume of CNY195 billion in August, down 7.8% monthly and a decline for three months in a row.

Rectification, transformation and depository banks are hot-button issues within the sector, an industry insider said. When a sector is in a transitional period, investors remain vigilant and take a wait-and-see approach to risks as much as possible, and this is exerting huge pressure on the development of China's online P2P platforms.

As China bolsters its regulation, turnover is expected to keep fluctuating in future and will not see a sharp rise in the short term, according to the insider.

Online lending platforms are also tending to polarize. The end of last month witnessed the demise of 66% of online lending platforms. A total of 882 platforms had withdrawn from the industry by the end of August, of which 225 were found to be problematic, per statistics from wdzj.com. Of these 225 platforms, loan balances at 47 surpassed CNY10 million. 

China has 5,118 P2P online lending platforms, including problem ones, industry data show. The southeastern economic dynamo of Guangdong ranked first in China with 909 platforms, followed by Beijing with 672. Guangdong and Beijing together make up 31% of China's total number.

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Keywords: Financial Regulation , P2P , Internet Loan Provider , Financial Performance