China Ramps up Enforcement Against P2P Lending

March 07, 2019 | BY

Marilyn Romero

Authorities have shut down batches of P2P platforms as defaults mount. A full regulatory review is expected to complete by end of March.

As part of China's efforts to rein in the excesses of the country's shadow banking system, authorities have steadily intensified their campaign against fraudulent peer-to-peer (P2P) lending platforms.

Typically, P2P lending provides an online method of debt financing that directly connects borrowers, individuals or companies with lenders. The first online lending platform, Zopa, was started in the United Kingdom in 2005, and China soon followed with the launch of the PPDAI Group in 2007.

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