Caixin OnlineFull text Central Bank Raises the Red Flag over P2P Lending Risks
07.04.2013 16:29

Central Bank Raises the Red Flag over P2P Lending Risks

PBOC surveys find host of problems with companies offering peer-to-peer loans, and some worry the transactions amount to illegal fund raising
By staff reporters Li Xiaoxiao and Yang Lu
A

(Beijing) – A recent report by the central bank about peer-to-peer (P2P) lending websites in China has shed light on some severe problems in the business for which there is, as yet, little regulation.

The original idea for P2P lending websites was that they were only a platform to match people with spare cash and those who need to borrow money. A typical transaction could see someone with cash to spare lend 5,000 yuan to a young couple wanting to decorate their new home.

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