Peer-to-peer lending growing 20% in China

Banking assets also rise 20% annually.

A new report from research and consulting firm Celent said China’s P2P lending market has grown from US$30 million in 2009 to US$940 million in 2012 and will reach US$7.8 billion in 2015. Celent also said that in the past five years, banking assets in China have been growing steadily at 20% per year, but the structure of the Chinese credit market has been “irrational.” "For example, bank loans tend to be given to large enterprises, while small and medium enterprises find it difficult to obtain a loan,” Celent noted. “The future Chinese credit market will become more diverse, so as to facilitate the provision of bank loans; interest rates will be liberalized, and a national credit system will be set up.”

The company said the P2P lending model is one example of this diversification. It said P2P lending relies on internet technology to carry out transactions. P2P also reduces risks and gives rise to competition in interest rates. Celent noted that the advent of the internet has influenced the finance industry to a certain degree, especially in the personal and small and medium enterprise financial markets. Its research revealed that P2P suppliers have increased from 40 in 2009 to 2,000 in 2013. In terms of loan amounts, the most common is between US$500 to US$800.

China currently has more than 2,000 P2P internet microcredit companies, but only around 10 of these companies are members of the China Association of Microfinance. The leaders include CreditEase, PPDAI, and my089.com. Celent predicts that in the future, the China Banking Regulatory Commission will impose more stringent requirements on the risk management of P2P companies