Soul Htite, co-founder of online financing bellwether Lending Club, established a similar online P2P (peer-to-peer) funding service in Shanghai with an impressive management group (Marc van der Chijs, co-founder of Tudou, recently joined in its board.).


Soul told TechNode that the company has secured a hefty capital injection in the recent round of financing, but did not disclose the details. He considered the new endeavor as a combination of Chinese financial market as well as technical advantages and experiences learned from Lending Club, rather than simply a Chinese version of Lending Club.

A spate of P2P online funding services that eyed on micro-credits mushroomed in recent years, such as CreditEase, Ppdai, Rong360, Haodai and Qifang, thanks to the huge market potentials in China. The P2P online lending aims to provide more choices, easier access and transparency to clients. The transaction amount of over 2000 online funding services processed 20 billion yuan ($323 million) worth of deals in 2012, plugging a hole in China’s banking system that has long neglected micro-credits for small- and medium-sized enterprises.

However, the lack of proper regulations becomes the development bottleneck for online funding industry. Fraud is a big concern for both unregulated players and clients, because no collateral is required from borrowers and the entry threshold is quite low. According to industry insiders, 30 percent to 50 percent of online funding platforms are being haunted with fraud risks, management risks, default risks and legal risks.

The People’s Bank of China announced an policy last month, forbidding online funding services from accepting cashes withdrawn from credit cards, one of the main funding sources of the industry. This move aims to prevent the credit risk of online funding services from the whole banking system.

Online funding services should be regulated in terms of entry threshold, operation, taxation and withdraw process in a bid to promote the development of this sector.

Emma Lee (Li Xin) was TechNode's e-commerce and new retail reporter until June 2022, when she moved to Sixth Tone to cover technology and consumption. Get in touch with her via or Twitter.