Regulators Inspecting Chinese P2P Lenders

Regulators are inspecting Chinese P2P lenders for compliance with new rules issued last year; specifically lenders must partner with a custodian and limit loans to RMB 1 million ($144,200) for individuals and RMB 5 million ($721,001) for companies; they are also not permitted to guarantee principal or interest; the country currently has more than 2,400 P2P lenders; experts expect the new rules will likely change the nation’s P2P lending landscape significantly; Roger Ying, founder and chief executive of P2P lender Pandai stated: “[There] will be shakeouts, though good for those which are compliant. It will take time for P2Ps to move to custodian banks. Presumably the most risk for investors is with P2Ps who do not have escrow [or] custodian bank accounts as retail investor sentiment is low.”  Source