Photo: iStock

Local regulators have received a detailed scheme from the top to rectify issues with the online micro loans business. The latter contains a total of 11 items covering the review and approval authority, the ceiling of integrated interest rates, as well as the lending scope of online micro loans, reported.

The rectification aims to crack down on institutions operating online micro loans without proper lending qualifications. Small loan companies who have set up departments for online micro loans must now comply with relevant documents issued by the State Council.

Regulators will revisit the qualifications of initiating shareholders, source of borrowers, online lending scenarios, data foundation and their digital risk control technologies.

Meanwhile, small loans companies’ equity management will also be reviewed. Whether their shareholders have a good tax record and financial status, or whether they buy into the company with entrusted funds or debt funds will all be subjected to the regulatory investigation.