(Yicai) Aug. 23 -- The number of Chinese small loan providers in China has shrunk nearly 40 percent in the past nine years, mainly because of the increased regulatory supervision over the industry.

China had 5,428 petty loan firms as of June 30, down 72 from Dec. 31 and nearly 40 percent from the peak at the end of June 2015, according to the latest data from the People's Bank of China.

As of the end of the first half, the outstanding loan balance of the Chinese small loan industry was CNY758.1 billion (USD106.2 billion), down by CNY10 billion (USD1.4 billion) from the end of last year, PBOC data also showed.

"Petty loan providers developed fast in a period of fast economic growth because their role is to supplement conventional financial institutions," an expert told Yicai. "However, with the slowdown in economic growth and stiffer regulations, they began to struggle."

China’s financial regulator issued a new policy in April to promote the continued closure of petty loan firms nationwide. For example, regulators from central Hubei province approved two small loan firms' dissolution this month, after shutting down nine more in the past two months. Other provincial-level regions have also implemented similar moves.

"Financial regulators may no longer approve the establishment of new small loan licenses," the export warned. "This means that acquiring existing premium licenses to carry out petty loan business in some key economic development areas or online petty loan business, which are relatively rare, will become pricier."

At present, Jiangsu, China's second-biggest provincial-level region by economic output, is home to 575 petty loan lenders, ranking first in the country, according to official data. China's largest provincial economy Guangdong province ranks second with 428 small loan providers. All other provincial-level regions have under 400 such firms.

Editors: Tang Shihua, Futura Costaglione