"From the rise, the popularity, and now the desertion, the P2P online lending market participants finally left the market after crossing the "mountain and the sea"."
In the special rectification of online loans with the main tone of liquidation, the P2P market continues to clear. Recently, according to CCTV news reports, Guo Shuqing, Secretary of the Party Committee of the People's Bank of China and Chairman of the China Banking and Insurance Regulatory Commission, said that the supervision of online loan platforms has gone through a very painful stage, and now it has reached a fundamental turning point, from a maximum of 5,000 to 6,000 to only 5,000 by the end of June. 29 are in operation, and the special rectification work may be basically completed by the end of the year and transferred to regular supervision. According to Guo Shuqing, lenders still have more than 800 billion in funds that have not been recovered.
People in the industry are accustomed to using the term "winter" to describe the general trend of the online lending industry's retreat. What is hidden behind is either the "hard-to-explain" supervision, the platform's difficulties, or the helplessness of investors. But no matter what, looking at the current situation of the online lending industry rationally is the proper meaning for operating platforms to finally achieve "safe landing" (transformation or exit).
P2P is gradually coming to an end
Looking back on the development of P2P, everyone talked about P2P when it was booming, and the profit rate of at least 20% or more attracted many ordinary users. However, high returns correspond to high risks. Many financial management projects launched by platforms have no real assets behind them, which results in investors’ financial management funds being “wasted”.
Against this background, the market clearing is accelerating, and some platforms have begun to withdraw passively or actively, while some platforms are working hard to obtain a "pass" (online loan registration).
The advancement of compliance development goals was ultimately disrupted by frequent thunderstorms in the online lending industry. From June to August 2018, online loan platforms such as Tang Xiaoseng, Niubanjin, Touzhijia, Qianbapa, Yindou.com, and Grassroots Investment successively experienced thunderstorms. Due to the large transaction scale and number of investor users on these platforms, market pessimism once reached its peak, and the momentum of runs intensified. At that stage, almost all operating online lending platforms encountered a liquidity crisis, which was regarded by industry insiders as the most serious crisis since the birth of the industry.
In order to avoid the spread of market panic, in August 2018, the National P2P Online Lending Risk Special Rectification Office issued the "Notice on Carrying out Compliance Inspections of P2P Online Lending Institutions" (hereinafter referred to as the "Notice") As well as the 108-item "List of Compliance Inspection Issues for Online Lending Information Intermediaries", the filing of online lending platforms has made substantial progress. According to the "Notice", supervision will generally divide compliance inspection into three steps: institutional self-inspection, self-discipline inspection, and administrative verification.
In accordance with local regulatory requirements, online lending platforms need to continuously reduce the balance to be repaid, the number of lenders, and the number of borrowers (i.e., the "three reductions") while promoting compliance inspections. The regulatory move is intended to promote the compliant development of online lending platforms. However, from a practical point of view, due to the lack of new business, some platforms have become increasingly difficult to survive as their existing businesses continue to shrink. In the end, they will either withdraw from the industry or embark on a new journey. "Point of No Return".
What some online lending platforms that have emerged from the investor run did not expect is that they will fall into a more difficult survival situation in 2019.
On the one hand, as leading P2P platforms such as Tuandai.com have experienced thunderstorms, market panic has revived, and supervision has continued to tighten amid risks. Some small and medium-sized online lending platforms have been liquidated one after another, or have been Transformation, or filing a case by the police; on the other hand, economic development has entered a downward cycle, private equity institutions have fled, listed company bond defaults have continued to occur, including banks, trusts, insurance and other financial institutions are inevitably affected, risk resistance P2P platforms, whose capabilities are far inferior to those of financial institutions, have become the "hardest hit areas".
There is no clear news about the plan to complete the filing in June 2019. Against this background, it has gradually become the common sense of regulators and practitioners that P2P platforms will withdraw from the stage of history.
Under the main tone of withdrawal, many domestic provinces and cities announced the ban on online lending institutions within their jurisdiction. According to incomplete statistics, up to now, more than 20 provinces and cities, including Inner Mongolia, Shaanxi, Jilin, Heilongjiang, Jiangxi, etc., have successively issued announcements to ban all online lending institutions within their jurisdiction.
Why has the industry developed so far?
"Why has the online lending industry developed so far?" This is the "soul question" that some observers of the online lending industry have asked from time to time. Looking back at the online lending industry over the past few years, the curtain of P2P has fallen, and there are many reasons behind it: platforms, supervision, and investors all have things to reflect on. “No snowflake is innocent in an avalanche.”
"The online loan industry is indeed a track that is easy to get into with a little effort. Only by 'shifting to 1st gear and applying some brakes' and moving forward can you get off smoothly, but how many people are there? Can you drive slowly on the highway? ”
An executive who chose to leave the online lending industry at its peak said frankly that in the early days, many platforms had good intentions and pursued development, but As regulations and market conditions change in the future, in order to maintain survival, some illegal measures may be taken. "The snowball will get bigger and bigger, and eventually it will fall."
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From a regulatory perspective, an industry insider close to the local financial office said in an interview with the media, "The supervision of P2P is a sports governance model, and the effectiveness of this conventional model is obvious. limited. On the one hand, in the early stages of P2P development, regulatory authorities need to make timely judgments on whether it has a financial nature and whether it should be included in the scope of financial supervision; on the other hand, after the regulatory authorities are clarified, the setting of regulatory rules has not effectively kept up. Supervision has never thought that there would be so many practical problems in P2P inspection and filing, such as central and local supervision, coordination of different departments, etc. In the end, it seems that everyone is in charge, but in fact no one may be in charge. ”
From an investor’s perspective, many investors are easily attracted by high returns in the early stages and do not understand that high returns require high risks to cover, and there is a lot of following the trend and fluke mentality, such as holding on to The mentality of "I can't understand it anyway, I will invest whatever others invest in" participated in it, and ultimately suffered from it. When there was a public opinion crisis in the online loan industry, some investors blindly ran on it, which to a certain extent aggravated the platform. Crisis.
In the short term, the risks of online lending have overshadowed the value of the industry itself. “This industry currently gives the regulatory impression that it is a bit like a ‘bad boy’, and it seems that the risks are greater than the actual functions. But if we look at the next five, ten, or twenty years, we should believe that the 'bad boys' will most likely become 'good boys' and be recognized by everyone. "A senior observer in the online lending industry emphasized that the existing financial system cannot effectively cover the financing needs of small, medium and micro enterprises, and the management costs of microfinance are high. Traditional financial institutions such as banks are not very willing to do this type of business. Ultimately, This has to be done through Internet financial institutions. All parties should look at the value of the industry and the current development situation rationally.
Under the general trend of withdrawal, some Internet companies have to deal with the current situation rationally. Loan platforms are gradually liquidating their existing businesses and exploring feasible transformation paths. However, this year’s sudden COVID-19 epidemic has brought certain challenges to the liquidation of online lending platforms. Currently, the transfer of creditor’s rights of some operating online lending platforms is slowing down. Slow down, investors panicked and ran on the platform, causing a redemption crisis on the platform.
The so-called "claim" means that investor A lent money to borrower B through the online loan platform and agreed on the amount. At this time, A has the right to require B to repay as agreed. This is a creditor's right.
If A needs money urgently after one month, but the repayment period has been agreed upon with B. Before it arrives, A chooses to transfer the creditor's rights to investor C and get the money back in advance. At this time, C becomes B's creditor. When the agreed repayment period is reached, B can directly return the money to C. , this is the transfer of debt.
It is worth noting that the speed of debt transfer is determined by market supply and demand. That is, when there are 10 A and 100 C in the market at the same time, the P2P platform can. Quickly help A find C, so that A can get back the borrowed money in advance. However, when the situation becomes 100 A and 10 C red, the speed of the online loan platform to find C will be significantly slower, and A will be unable to do so. Get back the borrowed money immediately.
Does the slow transformation of debt mean that the platform is in trouble or the investor's principal is "lost"? Even if the creditor's rights have not been transferred, as long as the loan is borrowed. If a person pays off the loan according to the time stipulated in the contract, the lender can still get the money back. For example, if the loan period agreed by A and B is one year, regardless of whether there is a role of C, after one year is up, B will have to pay back the loan. Return the money to A as agreed.
When B fails to return the money to A in time due to various factors, many investors point the finger at the P2P platform, believing that the P2P platform should advance the payment. As an information intermediary, P2P cannot have a fund pool according to laws and regulations. When A lends money to B, P2P as an information intermediary cannot touch the money and can only charge service fees, so there is no fund pool. If A wants to recover the money lent to B in advance, all the P2P platform can do is to "find" C.
However, investors currently lack investment confidence in the online lending industry, and regulatory requirements require that the platform cannot add new loans. For customers, etc., the possibility of finding C is greatly reduced. Even if the debt is due, due to multiple factors such as the COVID-19 epidemic, the economic downturn, malicious debt evasion, etc., there are still situations where borrower B fails to return the principal to A in time. .
“Investors should view this situation rationally, maintain positive and positive communication with the P2P platform, and do not use extreme means to protect their rights, as it may end up outweighing the gains. "A senior observer in the online lending industry bluntly said that platforms should also promptly inform investors of their creditor's rights to avoid concentrated runs by investors and properly resolve existing business risks. In addition, supervision should also introduce specific policies to guide the transformation of operating online lending platforms. Or exit in an orderly manner.