Beijing rolls out measures to curb rising P2P risks

BEIJING: Chinese authorities are rolling out 10 measures to curb rising risks caused by the troubled peer-to-peer (P2P) lending sector that has led to several protests in recent weeks, the official Xinhua News Agency reported yesterday.

A central government work group tasked with cracking down on online finance risks has held a meeting on the P2P industry to protect social and financial stability, the report said.

Since June, 243 online lending platforms have gone bust amid an intensifying crackdown on shadow banking, part of a broader campaign to reduce risks in the financial system. Many investors across the country hit the street to protest, demanding the government help them recover investments lost on failed platforms.

P2P platforms gather funds from retail investors and loan the money to small corporate and individual borrowers, promising high returns.

The new measures proposed by the government include asking local governments to set up “communications windows” to respond to requests by P2P investors and conducting compliance inspections on P2P companies, Xinhua reported.

Local authorities are “strictly banned” from allowing the set-up of any new P2P companies or online finance platforms, it said.

Borrowers who try to avoid P2P loan repayments will be put on a blacklist in China’s social credit ratings system. – Reuters