Chinese authorities are preparing new rules to reduce risks caused by the rapid growth of online small-loan companies, which have emerged as among the most active lenders in the country following a crackdown on peer-to-peer rivals.
Chinese companies including Wanda, Ctrip, and LeEco have launched small-loan units over the past year. Earlier this month, JD.com said it was spinning off JD Finance, while retaining a share of profits in a deal that valued the lender at Rmb50bn ($7.2bn), mirroring Alibaba’s spin-off of Ant Financial.
While the government has looked favourably on large companies with troves of proprietary data to expand into lending, regulators are growing concerned about a fleet of upstarts with little expertise in risk control. The regulator is considering ways to curb excesses in the small-loans market.