SoftBank-backed Yidai is latest to exit business amid China’s crackdown on P2P lenders

Photographer: SeongJoon Cho/Bloomberg

Yidai, an online peer-to-peer lending intermediary, is the latest to exit the business as China reins in its $176 billion experiment with this riskier form of financing.

The company set up a committee to start refunding its lenders after “months” of losses, Yidai said in statements over the extended holiday weekend. It has about 32,000 lenders with an outstanding principal balance of 4 billion yuan ($581 million), and expects to repay them in three-to-five years.

Yidai, which received investment from SoftBank China Venture Capital in 2014, also said shareholders and executives aren’t allowed to leave the country.

Chinese leaders are dramatically shrinking a market that spawned the nation’s biggest Ponzi scheme, protests in major cities, and life-altering losses for thousands of savers. Authorities are planning to wind down small- and medium-sized P2P lending platforms nationwide, people with knowledge of the matter had earlier said.

Tougher regulations and rising bankruptcies have spooked investors, and lending on those online platforms has plummeted, according to data from Rong360.com, a provider of information about financing and loan products. Analysts from China International Capital Corp. said they expect the number of P2P lenders to contract to fewer than 200 in three years’ time.

The move is in line with President Xi Jinping’s broader crackdown on shadow banking. In China, P2P platforms comprise one of the riskiest and least regulated slices of the system. The lack of oversight allowed for world-beating growth, with outstanding P2P loans ballooning from almost nothing in 2012 to 1.22 trillion yuan in December 2017.

Bloomberg

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.