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The Beijing Internet Finance Association has ordered P2P online lenders who are engaged in cash loans to check in with the association, and keep interest rates below 36%, The Paper reported.
All P2P platforms lending cash loans must meet the requirement by December 31. Furthermore, cash loan lenders without a lending licence or P2P platform operating licence will be banned at that time.
The crackdown on cash loans came after the China Internet Finance Association’s risk analysis on the micro cash loan business, prompting a notification to related parties to strictly abide by the law.
The national risk analysis found that 2,693 online platforms are providing cash loans to more than 10 million people.
The average lending amount is 1,400 yuan (US$211.87 dollars). However, there are only 249 registered online micro loan lenders.