National Chengchi University
  • 2019 Jun 14
  • NCCU Global ResearchIndustry Alliance (GLORIA) FinTech Seminar - The Monitoring, LawsRegulations of Disruptive Commerce: Take for Example the P2P Lending Data in China

The early development of P2P lending (peer-to-peer lending) was rooted in the convenience and freedom provided by the internet, which allowed the two parties of a loan to make transactions without spatial limits. This opened up a new source of financing for small enterprises. P2P lending saw rapid growth after the 2008 financial crisis. Financial services provided via online lending platforms satisfied the supply and demand of capital in the market. Different lending platforms made different progress and different countries have different lending policies and culture. According to data on the number of companies participating in lending platforms and the scale of numbers, Mainland China has seen the fastest development. Up until the second quarter of 2018, the scale of lending is calculated to be 203.6 billion USD, which is a 161% increase compared to the scale of lending of the same period in 2016. The P2P lending market in China prospers.

NCCU GLORIA established an extensive innovation incubating platform. In order to expand our horizon on international financing and spread digital finance thinking, the National Chengchi University Global Research and Industry Alliance (GLORIA) invited Professor Yan An of the Fordham University, Gabelli School of Business to give a keynote speech, which elaborates on his findings on how the Chinese government proceeds with the monitoring and drafting of laws and regulations with regard to the rapidly-growing P2P lending, a disruptive commercial activity, over the last few years. Professor Yan also discussed the changes in the P2P lending market of China under such monitoring.

Before March 25th, 2014, the Chinese government’s stance on its rapidly-growing P2P lending market was unclear. On March 25th, 2014 the China Banking Regulatory Commission (CBRC) first addressed the P2P lending issue in China with an official announcement. However, the CBRC neither positioned itself as a regulatory institution nor did it specify which institutions were under the regulation. It was not until July 18th, 2015 that the Chinese government officially appointed the CBRC as the regulatory institution. On April 12th, 2016, the laws and regulations were finally drafted and promulgated. How did the P2P lending market adjust to those changes then? Professor Yan An conducted a research on the biggest P2P lending platform in China - Renrendai (renrendai.com). The results showed that, on March 25th, 2014, the number of capital investors, the P2P supply, on the platform saw a significant increase, which could be seen as a positive signal. The study suggests that these changes drastically reduced the number of investors who feel uncertain towards P2P lending. In addition, in Professor Yan An’s research, even though the initial idea of the P2P lending market was to allow those who could not participate in the traditional banking system to obtain funding. He discovered that the lending transactions still took place mainly in Beijing, Shanghai and Guangdong, where there is sound economic environment. This reflects the fact that a regional bias against investors still exists.

The keynote speech was prepared with a Q&A session in mind. The participants brought forth questions about reproducing China’s individual lending experience in Taiwan. The discussion proceeded with much enthusiasm. Professor Yan An gave a practical analysis based on the results of his research. The keynote speech successfully promoted academic exchange.

 
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