P2P platforms have to rebuild credibility

Many peer-to-peer (P2P) lending platforms have gone bust since June. Two experts share their views with China Daily’s Yao Yuxin on how to rebuild the sector’s credibility. Excerpts follow: draw their money, which in turn has worsened the P2P crisis.

Therefore, the P2P platforms should comply with the standards released by the authorities and let the natural progression of the market take care of the rest.

Besides, instead of merely focusing on the P2P programs with high rates of return, investors should realize the risks associated with such activities and enhance their financial knowledge so they can make wise investment choices. the administrative measures, can help solve many, if not all, of the sector’s problems. Moreover, the combination of the two measures will effectively regulate the entire internet financing sector.

As the P2P platforms are related to the interests of thousands of investors, a healthy industry will boost the confidence and reputation of the entire internet financing sector. And self-discipline will accelerate this procedure.

Although many investors have suffered huge losses, the collapse of P2P platforms and the subsequent government regulation should teach lenders who are interested only in short-term high-return plans a valuable lesson — that long-term investment is sustainable and thus more profitable.

In addition, given that many fellow students have fallen prey to loan sharks, college students should more carefully check the licenses of lenders, and scrutinize their lending terms, interest rates and commission charges before taking a loan. It is always better to be safe than sorry.

As the new college semester has just started, university authorities should properly explain to the students how to apply for and get state subsidies and financial aid to meet their education and other necessary expenses, so that they don’t fall prey to loan sharks. Moreover, the education authorities should build a regulatory system in universities to protect college students against predatory lending platforms.

Huang Zhen, director of the research institution of financial laws in the Central University of Finance and Economics