Business / Industries

Traditional lenders feel the heat as P2P firms gain ground

By Cai Xiao (China Daily) Updated: 2014-09-23 07:05

Not surprisingly, the booming P2P lending sector has attracted some big investment institutions.

Legend Holdings Ltd has raised investments totaling tens of millions of yuan with two partners in Beijing Oriental Wealth Information Co Ltd, which operates the P2B plat form Yindou, the two parties jointly said recently.

It went online in January, and transaction volume has reached more than 200 million yuan by Aug 22. The number of registered users has risen to about 30,000.

During the first six months of this year, at least 10 P2P lenders received financing of more than 2 billion yuan from venture capital and private equity firms, according to Zero2IPO Group.

Tian said more players will enter the market soon to tap the huge growth potential.

"E-commerce platforms with enterprises' data have advantages of doing the business, and private finance groups are eager to go online to make them transparent," said Tian.

Ye Daqing, CEO of Rong 360, a Chinese online search platform for loan products, said some P2P lending companies have folded and more will do so because of intense competition. Some other firms may be acquired by larger players, Ye said.

"Industry leaders will dominate and account for 80 percent of the Chinese Internet lending market," said Ye.

There has been no regulations governing the P2P lending sector yet, but the regulator has given indications that it is taking stock of the situation.

An official at the China Banking Regulatory Commission said in April that the CBRC had started to study the regulations on P2P lending.

Li from the BCGA said P2P lending platforms are innovative finance options and need encouragement. However, it should be seen only as an intermediary and not as a guarantee for lending.

P2P lending platforms cannot cultivate capital pools and raise funds from the public, he said.

Li from 01caijinggg said P2P lending companies have to face technology and operating risks, with some companies having to undertake risk control measures.

Wang Pengcheng, CEO of Yindou, said the financing from Legend Holdings will be used to recruit risk control experts and improve brand management.

Traditional lenders feel the heat as P2P firms gain ground Traditional lenders feel the heat as P2P firms gain ground
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