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Get to know peer-to-peer lending in China: A lending platform in the world’s most populated country

DIGITAL VENTURES December 14, 2018 6:35 PM


Speaking of a financial service that clearly derives from technology, peer-to-peer lending would surely come to mind. It has connected individual borrowers and lenders on a digital platform while using AI and Machine Learning to facilitate the process. Digital Ventures have shared about the development of this industry in other countries but today we will highlight China. This is a country that not only has a large population and market but also is actively driving this industry during the past few years. Today, we wish to share an overview of peer-to-peer lending in China to all our readers.



An overview of peer-to-peer lending in China

As mentioned above, peer-to-peer lending in China is at the world’s top rank for its large market size. However, such claims would need actual numbers as reference. We wish to review a 2017 research by ACCA, MDPI, and Bank of Finland which summarized the peer-to-peer lending landscape in China below:

  • Overview. MDPI reports that in the first half of 2017, the peer-to-peer platform in China holds a transaction volume of 4.64 trillion RMB which is 670 billion USD or 21 trillion THB. This market is the world’s second-highest transaction volume next only to the USA.
  • The number of users in the system. In 2017, the number of lenders who are investors is two-folds higher meaning that the investors are 8.3 million while borrowers are 4.32 million. 
  • Service providers. In 2017, there are 1,900 peer-to-peer lending platforms. This is a drastic drop from the years before wherein, in 2015, the number reached 3,477 providers.
  • Borrowing behavior. Borrowers in the peer-to-peer platform not only use the funds for everyday usage or businesses, but many also undergo the process so that they can earn a credit score in the system. The ACCA survey reports that those who borrow to increase credit scores account for 51%. Moreover, over half of the peer-to-peer borrowers have never process loans from traditional platforms such as banks.
  • Lenders’ needs. Aside from the borrowers, lenders’ expectations are also the core driver of the system. ACCA reports that lenders mainly expect a return on investment when investing in the peer-to-peer platform. They hope to gain an average of 8-12% return within 3-6 months.
  • Amount and interests. The ACCA survey reports that borrowers will borrow around 3,000-5,000 RMB (approximately 14,000-24,000 THB) per time at the most. In terms of interest, they will mostly decide to borrow between the interest rate of 8-18%.
  • Locations that prefer peer-to-peer lending. Aside from the amount and value of the loans, the location with a lot of peer-to-peer lending users can also reflect the situation. The city with the highest value of loans are the big provinces such as Beijing, Shanghai, and Guangdong. The city with the highest transactions per month is Shanghai with the average is 20 times per month. This is higher than the country’s average of 5 times per month. 


Outstanding peer-to-peer lending firms in China

As mentioned, there are now up to 1,900 peer-to-peer lending platform in China. Below, we will introduce some of the outstanding players:

  • PPDai or PaiPaiDai is a Shanghai-based company which offers a consumer financial marketplace that connects borrowers and lenders. Today, they are the leading peer-to-peer lending provider in China. Also, they are the sole operator to raise funds in the New York Stock Exchange in 2017.
  • Lufax, a company in Shanghai, which began as a peer-to-peer lending platform developer that connects borrowers and lenders. Today, Ping An Insurance Group, a leading insurance firm in China hold their highest shares and they are expanding financial service opportunities.
  • Credit Ease is a financial firm known for its skills in wealth management. They have also launched a peer-to-peer lending platform that connects borrowers and investors. Investors will profit from loan interests. The advantage of Credit Ease is that they own numerous storefronts in big cities, thus, they are capable of both online and offline services. 
  • Hongling Capital was once the leading peer-to-peer lending platform in China with its headquarters in Fujian. However, after China’s new digital lending control policies in 2016, Hongling Capital announced that they plan to suspend the digital lending service in 3 years.
  • Dianrong is a financial firm from Shanghai who developed an online marketplace to connect borrowers and investors. Among the co-founders is Soul Htite, also co-founder of the Lending Club, a leading peer-to-peer lending website in the USA. Thus, Dianrong is often called the Lending Club of China.



Chinese government’s policies: Game changer in China’s peer-to-peer lending

Surely, an issue that involves human lives like finance will need government scrutiny so that it doesn’t have negative effects on people’s lives. The Chinese government is quite mindful, thus, after a long period of freely operating, they began issuing guidelines in 2015. Then, in 2016, the first governing policy was issued, and this expanded to other digital lending platforms in 2018. Let’s have a look at China’s peer-to-peer lending policies.

  • A ceiling for lending via the system. The government announced that the ceiling for individuals is 1 million RMB while for businesses it is 5 million RMB. A ceiling can greatly affect peer-to-peer lending operators as once borrowers have a limit, the profit from the client’s interest rates will also be affected. 
  • Screening regulations for service providers. Another worrisome policy for peer-to-peer platform providers is the screening process for issuing a permit to operate digital lending in China. This is because, at present, there is no information regarding the screening criteria. Therefore, if an active platform and users don’t meet these standards, how will they manage their existing contracts?


The overview of China’s peer-to-peer lending has surely shown us how interesting the finance business in the digital era can be. There are more stories regarding peer-to-peer lending in China and countries around the world, Digital Ventures will share more updates in the future.

Thank you for the information from,,, and International Journal of Industrial and Business Management.