Even after you’ve found few platforms you want to try, it is even more important to assess each investment opportunity’s risk profile. The shakeout in China’s $192 billion peer-to-peer lending industry is accelerating at a rapid clip. Asia Stocks Set to Follow U.S. Lower: Bonds Jump: Markets Wr... Argentina Hikes Rates After Prices Surge Past Expectations. Many of the failing lending platforms in China were never registered with regulators, thus making their practices less transparent to consumers. What caused this to happen and should this trend in the world’s largest P2P lending market worry investors in Singapore? An easy way to avoid the pitfall of choosing a crowdfunding platform that makes unrealistic claims is to thoroughly research various platforms in order to understand reasonable returns based on the characteristics of your investment, including size, duration and risk. Authorities are focused on weeding out bad actors in the P2P industry, one of the riskiest and least-regulated parts of China’s $10 trillion shadow-banking system, according to Chen Shujin, chief financial analyst at Huatai Securities Co. in Hong Kong. At least 118 platforms have failed this month through early Friday, according to Shanghai-based Yingcan Group, whose tally for July stood at 57 just three days ago. While SOE juggernauts in China may be too big to fail, the P2P lending sector was too big to prevail. For example, when comparing crowdfunding lending opportunities, you will ultimately need to assess how likely the borrower is to repay your loan. Covid Superspreader Risk Is Linked to Restaurants, Gyms, Hotels, China-Anchored Free-Trade Zone, World’s Biggest, Nearly Done, Stocks Slump on Lockdown Angst Amid Stimulus Limbo: Markets Wrap, Target Is Reopening Its Looted Store With Black Shoppers in Mind, Deep-Freeze Hurdle Makes Pfizer’s Vaccine One for the Rich. The nation’s P2P platforms, which facilitate loans from mostly individual investors to borrowers willing pay high rates of interest, have about 50 million registered users and 1.3 trillion yuan ($192 billion) of outstanding loans, which yielded an average 10.2 percent in the first half of the year, official figures show. Foreign companies complaining about purported lack of skilled workers in Singapore — what happened to the skills transfer envisioned by Goh Keng Swee? There are just 29 P2P lenders left in China today, compared to 6,000 when the crackdown began in 2015. For example, platforms must now use a custodian bank to hold investor and borrower funds and are required to fully disclose their use of deposits. Up to 90 per cent of peer to peer lending platforms in China could fail this year amid stricter regulatory requirements, according to a multi-agency report by Chinese officials. The company is reportedly planning to list in the U.S. in a deal that would raise up to US$3 billion. In November 2019, Beijing ordered remaining P2P lenders to exit the industry within two years. The tech giants have troves of user data, which could help them better assess borrower risk. In contrast, erstwhile P2P lender Lufax exited the business more than a year ago, citing increasingly stringent regulatory requirements. China's peer-to-peer lending crackdown has been a lesson in risk management with Chinese characteristics. Brexit talks go into next week, with EU and UK divided. Massive scams on the largely unregulated platforms defrauded retail investors of their life savings, threatening social stability. China’s clampdown on financial risk has weighed on P2P platforms for the past two years, but the pressure has intensified in recent months after the country’s credit markets tightened and the banking regulator issued an unusual warning to savers that they should be prepared to lose all their money in high-yield products.
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