Exclusive: P2P Registration System May Roll Out in Second Half – Caixin
What happened: China is expected to start piloting a registration program for online peer-to-peer (P2P) lending platforms in the second half of this year. Regulators plan to start requiring P2P lenders in pilot cities, located in more developed regions, to register with the monitoring system. Regional and national players will have to meet certain requirements on registered capital, risk reserves, and lender risk compensation in order to be registered in the system. Regulators aim to roll out the national registration system by 2020.
Why it’s important: The P2P lending sector has been in turmoil since authorities began clamping down on the risky financial practices and fraud activities in 2016. The new registration system could mean further restructuring for the industry. The new registration program will likely hit smaller regional platforms harder than the well-funded peers, forcing smaller players to downsize operations or consolidate.
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