Listing to boost Internet finance firms

According to Dou, a good Internet finance company should have an innovative business mix and strong technology to collect and analyze credit data.

"China should step up the pace of regulations for the Internet finance sector, especially those for controlling systemic risk," he said.

Li Yaodong, research head at 01caijing, a portal that covers Internet finance, said the government backing will ensure rapid development of the sector, boost overall capital usage and broaden financing channels.

"From a securities regulator's perspective, we hope good companies with the right potential will get listed on the A-share market and contribute to the growth of the domestic stock market," Li said.

"The government is wary of the risks that could arise from overseas listings of Internet finance firms as they possess key financial data."

The trading value of China's booming peer-to-peer platforms hit 252 billion yuan in 2014, nearly double the level seen in 2013, according to the Internet Society of China.

While China's P2P lending platforms have emerged quickly, so have the risks associated with such enterprises.

Media reports have told of bosses of several P2P firms disappearing after the lenders failed to give investors promised returns.

Dou said the biggest risk for Internet finance firms is loss guarantee.

Lufax.com, the domestic P2P lending platform set up by the Ping An Group, which had promised to guarantee investors' losses, had overdue bad loans of about 250 million yuan, according to China Business News.

Li said the rigid redemption industry rules are another gray area for Internet lending companies. To avoid this, information transparency and loan loss provision are necessary, he said.

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