China online finance regulator tells unqualified micro-lenders to stop lending
25/11/2017 02:44
BEIJING, Nov 25 (Reuters) - The National Internet Finance
Association of China issued a risk warning letter late on Friday
telling "unqualified institutions" to immediately stop offering
loans as Beijing steps up a crackdown on the micro-loan sector
to fend off financial risks.
The 1 trillion yuan ($151.5 billion) short-term, unsecured
lending sector, known as "cash loan" in China, has been accused
of charging exorbitant interest rates and violent debt
collection practices.
In Friday's warning letter, the Internet Finance
Association, a government-backed industry group, said the
unqualified micro lenders are disrupting economic and social
orders and must stop lending immediately.
"Some institutions are not qualified to issue loans but have
used false promotion to attract clients, conduct violent debt
collection, and charge extremely high interest rates and fees,
causing financial risks and social problems in some regions," it
said in the letter released on its website.
Qualified lending institutions should also increase
self-discipline, charge interest rates at a reasonable level,
and increase information disclosure, the association added.
The companies are not allowed to conduct violent debt
collection or harass unrelated people, it said.
China has started to take steps to rein in the loosely
regulated lending market.
On Tuesday, a top-level multi-ministry body, tasked by the
central government to oversee the internet finance sector,
issued an urgent notice to restrict granting of new approvals
for micro-loan firms, Reuters reported on Wednesday.
urn:newsml:reuters.com:*:nL3N1NR4EK
Shares of U.S.-listed Chinese online finance firms fell this
week following the government crackdown.
($1 = 6.5998 Chinese yuan renminbi)
(Reporting By Shu Zhang and Josephine Mason; Editing by
Christian Schmollinger)
((shu.zhang@thomsonreuters.com; +86 10 6627 1271; Reuters
Messaging: shu.zhang.thomsonreuters.com@reuters.net))
Keywords: CHINA REGULATIONS/LOANS