China’s outstanding peer-to-peer loans more than doubled to a record high at the end of September, according to an industry report, underscoring the challenges authorities face in reining in the unruly and fast-growing sector.
P2P loans surged 153.5 percent to 956 billion yuan ($143 billion), the official Xinhua news agency said, citing a report by P2P industry portal P2P001.
The data comes more than a month after China’s banking regulator unveiled aggressive measures to restrain the P2P sector, warning that almost half of the 4,000-odd online lending platforms were “problematic”.
China’s P2P and online finance industry has boomed in recent years, prompting the government to take steps to clean up the industry after a series of scandals and multi-billion dollar failures.
The average interest rate for P2P lending stood at 8.7 percent, unchanged from a month earlier and still near a record low, Xinhua said on Tuesday.
China’s government for years maintained a hands-off approach to promote alternative sources of funding for consumers and small businesses, which often struggle to get credit from banks and other mainstream financial institutions.
The China Banking Regulatory Commission (CBRC) said in August that some troubled P2P companies, suffering from capital constraints and poor management, had seen executives run away with investor money.
($1 = 6.6685 Chinese yuan renminbi)