<article>Lending transactions via China&#8217;s peer-to-peer (P2P) platforms reached 982.3 billion yuan ($151 billion) in 2015, according to a report released by <a href="http://www.wdzj.com" target="_blank">Wangdaizhijia.com</a>, a mainland Chinese internet financial services web portal.</article>

Lending transactions via China&#8217;s peer-to-peer (P2P) platforms reached 982.3 billion yuan ($151 billion) in 2015, according to a report released by <a href="http://www.wdzj.com" target="_blank">Wangdaizhijia.com</a>, a mainland Chinese internet financial services web portal.
This is a 288.6 per cent increase from the 252.8 billion yuan ($38.77 billion) in 2014, with mainland Chinese P2P lending platforms brokering an estimated 1.37 trillion yuan ($210.1 billion) as of the end of December 2015, accounting for 2,595 P2P platforms across China. This represents an increase of 1020 new entities, compared with 2014 estimates.
P2P lending, or lending done without a traditional financial intermediary such as a bank, has grown quickly in China in the past few years as investors seek higher returns than bank deposits, while small businesses find it easier to secure funds through P2P platforms. These allow small businesses and individuals to borrow from each other directly, increasing the available channels to raise capital from.
However, with China increasing the stringency of regulations, the volume of P2P platforms is not expected to increase substantially for 2016, with a draft regulation imposing 12 restrictions on P2P platforms.
This legislation will prohibit platforms from such actions as: accepting public deposits; pooling investors&#8217; money to fund in-house projects; and the provision of any guarantees for lenders. Specific guidelines on information disclosure for non-performing loans are also likely to be announced.
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P2P lending has emerged as China&#8217;s third most popular investment vehicle, specifically for quantum of less than 500,000 yuan ($76,685), according to a <a href="http://www.ccfgroup.com/newscenter/newsview.php?Class_ID=800000&amp;Info_ID=20151222035" target="_blank">recent survey conducted by P2P lender iqianjin.com</a>. which polled a sample of 5000 individuals. 38 per cent of respondents were using P2P platforms are investment platforms, ahead of bank deposits (37%) and stocks (35%).
However, they remained behind Internet-based investment services (76%) and the wealth management products currently being retailed by commercial banks (40%). This finding of the growth of P2P lending comes at a time when the industry is troubled. The end of November 2015 saw 1157 platforms reporting financial problems.
Some reported issues facing investors are senior executives absconding with investors&#8217; money, or difficulties faced by investors in accessing and withdrawing their funds &#8211; risks associated with a lack of supervision and industry regulation. WDZJs&#8216; report noted that 896 platforms reported operational problems in 2015, more than triple 2014 figures.
A Global Times <a href="http://www.globaltimes.cn/content/950849.shtml" target="_blank">report</a> noted that the P2P finance industry in China is likely to face restructuring as regulations become more stringent, with a greater emphasis on due diligence and compliance. Rising compliance costs are also likely to force out smaller ventures and trigger a wave of industry consolidation.
Improvements in access to credit risk information by P2P lending platforms are also necessary, in order to increase the quality of evaluation of borrowers and enhance their risk control capability.
New regulations are also likely to require P2P lending platforms to be backed by banks in the future. However, this could inhibit the growth of the sector and cause operational difficulties, with banks unwilling to underwrite the risks involved in P2P lending.
In an interaction with China Daily, Yang Fan, the founding partner of P2P lending platform iqianjin.com, stated: &#8220;We look forward to the introduction of regulations on P2P lending and hope the regulations will not be too rigid. We would welcome the gradual, smooth elimination of unqualified platforms, but do not want to see any abrupt or radical reshuffle of the industry.&#8221;
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China's online P2P lending market has nearly quadrupled over 2015, according to a WDZJ report.

China's online P2P lending jumps four-fold to touch $150b: Report

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China's online P2P lending jumps four-fold to touch $150b: Report

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