More than 80% of China's 6,200 P2P lenders [since 2015], have either been shut down or troubled, according to Shanghai-based researcher Yingcan Group. Zendai, a private Shanghai-based investment company, is the latest to pull out of P2P lending in China, shutting down two P2P lending units worth $1.4b.
As China rolls out even more stringent P2P regulations, we're likely to see more platforms fail. The country's regulators are expected to roll out strict registration rules for P2P lenders later this year, clarifying, among other things, minimum capital reserves to set aside for risks and loss provisions for investors, per the Post. Coupled with the existing requirements, more players are likely to struggle to meet these heavy regulatory demands, driving more platforms out of business. Ultimately, these regulatory introductions should end up squashing much of the nefarious practices that have hampered the industry and make those players that survive more robust.