AN online peer-to-peer (P2P) credit loan platform has emerged in Shenzhen s private lending market.
Individual borrowers and lenders use the platform to get to know each other and complete lending procedures, the Shenzhen Economic Daily reported yesterday.
The platform operator will charge a service fee for credit assessment of borrowers and collection of repayment for lenders.
A woman from Gansu Province, Cao Shuping, received eight offers in two days after she posted her information on CreditEase, a private lending platform, seeking a 4,000-yuan (US$601) loan to buy more goods for her shop.
Poor people have credit and credit has value, which is our basic value, said Tang Ning, CEO of CreditEase.
Established in 2006, CreditEase started by helping students obtain loans for school fees through the P2P referral engine.
Annual interest rates for loans through CreditEase were above 10 percent, determined by the borrower s credit rating, Tang said. However, the interest rate would not be more than four times the interest rate charged by banks.
When borrowers fail to repay the loan and interest, the platform pays lenders first.
Tang studied the practice in Bangladesh where local farmers were aided by micro-loans to develop farming.
We are just a transaction platform belonging to a modern innovative service industry, Tang said.
There had been no defaults on loans by CreditEase.
Han Fuling, director of the Finance and Securities Research Institute at the Central University of Finance and Economics, said financial innovation always came before corresponding supervision. Financial supervision departments should standardize qualifications of market access for leading online platforms, Han said.
The Shenzhen financial development office said the third-party lending platform was legal because it functioned as an agent.
The People s Bank of China was conducting research on online lending platforms, the paper quoted insiders as saying.
There are more than 10 online lending platforms in China with a total monthly trade volume of more than 30 million yuan.
(Li Hao)
