China Tightens More Credit: P2P Lending Cap

Slowing money supply growth, slowing real estate, now a cap on P2P lending. Leaving aside whether the rules are good are bad, the effect in the short-run is negative for credit growth.

SCMP: China imposes cap on peer-to-peer loans to rein in runaway ‘shadow banking’ scams
China’s banking regulator has imposed a cap on the country’s peer-to-peer loans, in a long-awaited move to rein in runaway lending by so-called shadow banks and defuse their potential threat to the financial system.
Under the rules, individuals are allowed to borrow a maximum of 200,000 yuan (HK$233,010) each from any one P2P platform, with the total loans per person capped at 1 million yuan.
For companies, the cap is set at 1 million yuan per platform, with a total limit of 5 million yuan per borrower, said Li Junfeng, the China Banking Regulatory Commission’s director of inclusive financing.

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