According to multiple reports, rules have been drafted and are being distributed for review by various industry experts and platform operators. An internal meeting was held recently at the CBRC where proposed rules were reviewed. The direct lending industry has been expecting clarified guidelines for quite some time as the industry has rocketed in popularity with consumers. Draft rules are said to include financial requirements and to prohibit actual physical branches. Final rules may be more lenient.
The new rules are said to require a minimum of CNY 30 million (approximately USD 4.8 million) in capital to operate in a field that has experienced more than a few dramatic failures. One publication estimated that 2 out of 5 P2P lending portals are fraudulent. The peer-to-peer lending industry in China is the largest in the world with hundreds of platforms providing diverse services. The new capital requirements will create a significant hurdle for new entries into the space. Recently the direct lending industry has seen intense interest from Alibaba, TOM Group and others.
The CBRC is expected to release final rules in June 2015.
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