(Yicai Global) Sept. 13 -- Yan Zhi Dai, a new microfinance app developed by Chinese cosmetics firm Jumei International Holding Ltd. [NYSE:JMEI] is illegally offering loans to students, a report from China Online suggests.
The company has not yet commented on the matter.
Yan Zhi Dai’s service terms contain information about loan applications made by students, the report said. For example, article 1.9 provides that if the applicant is a student, the money borrowed should be used only for study or work purposes. The news website solicited information from internet users via Chinese social media outlet Weibo, run by Weibo Corp. [NASDAQ:WB], and discovered that a student in southern Guangdong province had borrowed CNY999 (USD153) using the app.
China has recently clamped down on student loan businesses run by peer-to-peer lenders, Zhao Jianjun, deputy head of the Ministry of Education’s finance department said quite explicitly that “any online lending organizations are not allowed to provide loans for university students” at a press briefing on Sept. 6.
Chen Ou, founder of Jumei International, has been promoting Yan Zhi Dao on Weibo. Every new user of the app can borrow up to CNY999 interest free, and the firm is offering an ‘incentive fund’ of CNY99.9 million to encourage new users to take out loans, Chen posted online on Aug. 31 and Sept. 1.