(Yicai Global) Nov. 28 -- China's regulators have lately striven more to rectify internet finance (Finternet), small loans above all.
Three Finternet operators have pared their loan interest and rates to under the 36-percent statutory usury threshold.
Finternet platform 9fbank.com announced yesterday it would trim total annualized costs of its 30-day small cash loans below 36 percent effective immediately, Securities Times reported today, even as Weshare Financial likewise pledged to cap the annualized interest and rate on all its small loans at under 36 percent on Nov. 26. Qudian Inc. [NYSE:QD] also earlier declared that the annual interest rate on its cash loans extended via the Alipay payment portal of Alibaba Group Holding Ltd. [NYSE:BABA] will not exceed 24 percent.
Chinese law deems private loans with an annual interest rate above 36 percent usurious. Various Finternet platforms have obtained annualized loan income of more than 36 percent by charging low interest, but high service fees. Though regulators have not yet formulated set standards for interest rates on small internet loans, an emergency notice issuing Nov. 21 announced a moratorium on licensing approvals for small internet loans and augured that a raft of more detailed rules is likely to emerge in coming days.