Days after its splashy US IPO, Chinese online loan provider Qudian is undergoing a major crisis as local media has begun questioning the sustainability, validity and morality of their business.

Born out of student-based Qufenqi, Qudian first grew by offering small loans to colleges students to capitalize on the rising spending power of China’s younger generations. At the peak of the student micro-loan trend, the firm received investment of Alibaba’s financial affiliate Ant Financial. This October, the red-hot Chinese fintech concept drew strong demand for the company to price the fourth-largest US IPO this year.

However, local media’s queries have cast a shade on their prospects of the company. The criticisms are mainly aimed at the legitimacy of their business. As a major player in the student micro-loan sector, Qudian claims to have suspended student-targeted loans in November 2015 as the state has issued a ban on online loans to college students following public outrage over exorbitant rates, porn for payment, and various financial scams.

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Emma Lee

Emma Lee is Shanghai-based tech writer, covering startups and tech happenings in China and Asia in general. We are looking for stories related to tech and China. Reach her at lixin@technode.com.