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China to kick out unlicensed internet microloan lenders

Updated: Nov 24,2017 5:06 PM     cgtn.com

China’s central bank and China Banking Regulatory Commission (CBRC) held a joint meeting on Nov 23 on the rectification process of web-based microloan business with local regulators from 17 provinces that allow online microloan business.

The central bank and CBRC did not disclose the details of the meeting, but a microloan lender from Guangzhou, South China’s Guangdong province, said that the local finance regulators reported their survey results of the business and central regulators were reminded about 20 lenders of potential risks, yicai.com reported.

CBRC also plans to control the number of licensed players and kick out unqualified ones, International Financial News reported, noting no more internet micro-credit licenses will be issued in addition to the current 157 that were already obtained.

Licenses entrustment is also forbidden in the industry, the report added.

According to the rectification plan, the groups in only two categories of institutions could obtain the license: large-scale state-owned-enterprises and leading internet groups, and each entity can just have one license, the report elaborated.

Small debt claims are not allowed to be traded or securitized, the report said.

“This is just a beginning. Cash loans will be under strict supervision and regulation,” said the head of a Beijing-based online loans platform who requested not to be named.

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