The Impact Of Ezubao On China’s P2P Lending Industry: Q&A With The Co-Founder of Dianrong.com

2016 has not been a good year for China’s peer-to-peer lending industry. The year began with the collapse of Ezubao (e租宝), a P2P lending site that swindled 50 billion RMB (about $7.5 billion USD) from almost a million investors. Since then, the scandals haven’t stopped.

Part of it has to do with how fast China’s P2P lending landscape has developed over the past few years. According to data provider Wangdaizhijia, between 2012 and 2014, the number of P2P lending platforms in China jumped from 200 to 1,575. Today, there are more than 4,000.

In a country where the majority of citizens have never borrowed money from a bank, it’s not surprising that companies have jumped in to fill the gap for consumers and small businesses who need loans. Last December, regulators put out a draft of policies for P2P lending companies, such as prohibiting platforms from directly handling or managing funds (link in Chinese).

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