Risks lurk in P2P lending sector, ratings agency warns

By GAO YUAN (China Daily) Updated: 2015-01-22 07:29

The 15 peer-to-peer company leaders from China attended a forum at the London Business School on the future of P2P lending. Cecily Liu / China Daily

Dagong did not specify why lufax.com was classified as a lender with "abnormal investment risk".

Calls for comment to the public affairs office at Ping An went unanswered.

South China's Guangdong province has the largest number of P2P lenders on the alert list, according to Dagong.

Regions with a vibrant private sector have more pronounced online lending problems than the less-developed places, it said.

Despite the increasing risks, the Internet-based lending market is set to expand in 2015, researchers have said.

Industry consultancy IDC said the high penetration rate of the Internet in China will allow online lending to reach more areas this year.

And with industry regulations likely to be in place before year-end, the Internet finance sector will exert increasing pressure on bricks-and-mortar lenders, IDC said.

Related story: P2P peers lend each other an ear, by Cecily Liu, China Daily

Chinese lending company executives exchanged views with their UK counterparts, and both sides found ideas they could borrow

British and Chinese peer-to-peer lending firms recently had a chance to learn from each other during a weeklong visit by Chinese company leaders to the United Kingdom.

The business involves lending to unrelated individuals, or "peers", without going through a traditional financial intermediary such as a bank or other traditional financial institution. It emerged in its modern form about a decade ago in the UK.