(Yicai Global) Sept. 3 -- Chinese peer-to-peer lenders recorded a big slowdown in business last month as the earlier hubs for consumer crowdlending, including Shanghai and the southern province of Guangdong, have started tightening regulation.
P2P lenders logged a total of CNY78 billion (USD10.9 billion) in transaction volumes, which was 13.3 percent less than during the previous month, Chinese P2P portal Wdzj said in a report, suspecting regulation as one of the reasons behind the slump. August's figure was nearly 35 percent less from a year ago.
The waning cash flows may be caused by a shrinking group of market players. The number of P2P platforms dropped by one-half from the previous year to about 700 by the end of August. In nine regions, including Chongqing and the Inner Mongolia Autonomous Region, the number declined to less than 10.
Shanghai's authorities completed talks with the actual controllers and executives of P2P lenders in their jurisdictions, suggesting them to rectify their business models or leave the market, The Paper reported early last month, citing industry insiders.
Beijing, Shanghai and Guangdong province used to be the top three regions for the sector but their transaction volumes ebbed in August. The decline was the biggest in Shanghai at nearly 29 percent, according to Wdzj. Transactions in Beijing reduced by 3.7 percent to CNY33.8 billion. They dropped by 18.6 percent in Guangdong to CNY12.3 billion.
The Guangzhou Municipal Local Financial Supervision and Administration warned borrowers and investors late last month about the perils of P2P platforms, reminding them that even if the name of a company is registered it does not mean that it has the credentials to conduct financial business as none of the P2P platforms have been approved by the city's financial regulators.
Editor: Emmi Laine