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P2P Industry Expands Quickly in China
Peer-to-peer lending and investing, commonly known as P2P, has been booming in China since 2012. According to statistics from China Industry Research Net, the P2P sector saw more than 100 percent growth in 2014. And with the release of China’s new Internet finance guidelines, many say P2P is headed for further expansion in ways that could change people’s lives.
Jiang Zeyang began using peer-to-peer online investment services a year ago. Working at an investment company, he sees P2P as a perfect way to increase his deposits.
“The stock market fell a lot a month ago. We ordinary people better not go into this kind of highly risky investment. If putting the money in the bank, the interest rate is too low. P2P investing is convenient and offers higher returns. You can finish the whole procedures of investing through your mobile phone, without waiting in long queue in the banks and preparing for all kinds of documents,” Jiang said.
Peer-to-peer investing is the practice of lending money to unrelated individuals, or “peers”, without going through a traditional financial intermediary such as a bank.
Thanks to China’s huge number of Internet users and streamlined applications, the country’s P2P industry has seen soaring growth since 2012.
“We use big data to simplify our customers’ application procedures for loans. They only need to fill in three or four information blanks. Our customers can get their loans as little as ten minutes and for as much as 10,000 yuan,” Yirendai.com CEO Fang Yihan said.
“Lenders can visit our website to choose who they want to send their money to after researching all the necessary information of qualified loan creditors.”
Most Chinese P2P companies choose their loan applicants carefully, but their ultimate aim is to help an under-served market.
“One difference between internet finance companies lies in their target customers. Internet finance companies aim to serve micro-and-small-sized enterprises and those needing small loans, which the traditional finance institutions do not cover,” Fang said.
The government says the Internet has become a major driver of China’s economic development and has dramatically changed Chinese society. And things are set to change even more, with the introduction of Internet Finance in the new “Internet Plus” plan. For many ordinary Chinese, it can further transform their ideas about wealth management and life style.
Source:CCTV