Online lending industry is expected to bid farewell to savage growth

 Online lending industry is expected to bid farewell to savage growth

The increase of access threshold will slow down the growth of the overall scale of the whole network micro loan market, which means that it will be more difficult to apply for a national network micro loan company license

Boots are about to land, and the first supervision method on Internet micro loans in China has finally come! In order to standardize the network small loan business of small loan companies and unify the supervision and operation rules, the China Banking and Insurance Regulatory Commission, together with the peoples Bank of China and other departments, drafted the Interim Measures for the management of online small loan business (Draft for comments) (hereinafter referred to as the draft for comments), which is now open to the public for comments.

A number of industry insiders interviewed said that the release of the draft means that the supervision of online microfinance business will be in line with that of banking supervision, which is conducive to preventing the underlying risks brought about by cross regional operation of small loan companies, improving the situation of regulatory depression in financial supervision in different places, raising the overall threshold of online microfinance, and combating speculation And regulatory arbitrage has strong binding force.

Financial innovation continues to upgrade, online loan business supervision lags behind

In the era when Internet lending is far from emerging, the credit demand of residents and small and micro enterprises that have not been met by the banking system is huge. With the policy support, the social image is good, and the small loan companies appear at the speed of more than 1000 each year.

The source of the business qualification of network micro loan can be traced back to the guidance on promoting the healthy development of Internet finance issued by ten ministries and commissions in 2015. According to the opinion, network micro loan refers to the micro loan provided by Internet enterprises to customers through the micro loan companies controlled by them. In terms of function orientation, small loan companies should follow the principle of small amount and decentralization, conform to the national industrial policy and credit policy, mainly serve small and micro enterprises, farmers, urban low-income groups and other key service objects of Inclusive Finance, practice the concept of Inclusive Finance, support the development of the real economy, and give full play to the channel and cost advantages of network microfinance.

With the development of Internet technology, Internet small loan companies, relying on the advantages of scene, traffic, data and national exhibition, have made Internet loans record high through loan assistance and joint loans. In order to regulate the development of Internet loans, the industry has been calling for the development of national network small loan supervision measures.

Guo Tianyong, director of the China Banking Research Center at the Central University of Finance and economics, believes that the Internet-based network microfinance model has a large customer space, and it is not limited to a certain region, but the ability of each company to screen and screen customers is different. If you cant identify the customers credit, you have to do something else. If we say that companies without technology content will take some usury or some vicious collection, which will easily lead to some social problems.

Chen Wen, director of the digital economy research center of the school of Finance and economics of Southwest University of Finance and economics, believes that most of the online micro loans originally approved by local governments have problems in trans provincial operation. For the Internet small loan industry, the next three years need to go through rectification.

When a large number of online micro loans were set up, there was a phenomenon of regulatory arbitrage . In some areas such as the central and western regions to register companies, and then through the Internet nationwide exhibition industry, the actual business headquarters in Beijing, Shanghai, Guangzhou, Shenzhen and other first tier cities or economically developed areas. If the business retracts back to the province or region where the registration place is located, there is little market space. Chen said.

Online lending breaks through territorial restrictions and new regulatory regulations are imminent

It is because the operation of online micro loans has been extended to the whole country on the Internet, breaking through the original territorial restrictions - the financial business operated nationwide should have been managed by the central financial supervision department, so there is a saying that the license plate of online micro loan is super born in the industry. But after ant group announced its IPO, people realized that this humble lending qualification was the cornerstone of ants 2 trillion yuan valuation.

Regulators have also noted the risks. In February 2017, Li Junfeng, former director of Inclusive Finance Department of China Banking Regulatory Commission, pointed out at the first member congress of China Association of small loan companies that approving the establishment of network micro loans operated nationwide has exceeded the responsibilities of local financial supervision institutions. We should treat the cross regional network micro loans carefully and prevent the formation of new regulatory arbitrage or risk.

In the window period when there is no regulatory document explicitly forbidding, many enterprises consider to apply for online micro loans for business needs or license hoarding, and many places also pay close attention to approving the establishment of network micro loans for the consideration of attracting investment. There are online micro loans in Wusu of Xinjiang, Hohhot of inner Mongolia, Wuhai of Inner Mongolia, Shuangyashan of Heilongjiang, Lhasa of Tibet, Yinchuan of Ningxia and Linfen of Shanxi The company was established. Where the policy is loose, shareholders will go where to set up a new network microfinance company. A senior person in the microfinance industry introduced.

The barbaric and disorderly development of Internet lending has greatly squeezed the living space of traditional microfinance. According to the data of the industry association and the China Banking and Insurance Regulatory Commission, the number of traditional small loan companies has shrunk from 12000 during the peak period in 2015 to more than 9000 by the end of 2019, and the number of employees has decreased from more than 100000 to less than 75000. In four years, more than 3000 traditional microfinance companies have left the market.

Nowadays, there are many challenges in the return of online micro loans to offline or provincial operations. Before that, the profit margin of small loan companies has been greatly squeezed. On August 20, this year, the Supreme Peoples court revised the judicial protection upper limit of private lending interest rate to 4 times LPR, that is 15.4%, significantly lower than the previous interest rate benchmark of 24% and 36%.

According to industry insiders, the regulatory measures for online microfinance have been brewing for more than three years, until the release of the draft for comments on November 2 this year.

As far as the industry is concerned, the draft has a wide influence. Only the registered capital of the small loan company operating the network small loan business is not less than 1 billion yuan, and it is a one-time paid in monetary capital; the registered capital of the small loan company operating the network small loan business across the provincial administrative regions is not less than 5 billion yuan, and it is a one-time paid in monetary capital. This one, will many network small loan company card outside.

In the view of many industry insiders, from the perspective of registered capital, compared with ant group, those small-scale online small loan companies with joint loan as their main business are more hit, their living space is greatly reduced, and they will face transformation or exit at least.

In response to the problem of access threshold, Yin Zhentao said that the increase of access threshold will lead to the slowdown of the growth rate of the overall scale of the whole network microfinance market, which means it will be more difficult to apply for a national business network micro loan company license. The network micro loan operating across provincial administrative regions needs 5 billion yuan, and it is a one-time paid in monetary capital. This threshold will limit most of the current network microfinance companies.

In view of the new regulations, Tencent TenPay made rapid adjustments. On November 4, Shenzhen TenPay network finance micro loan Co., Ltd. changed its business and registered capital from 1 billion yuan to 2.5 billion yuan, an increase of 150%. It is understood that this is the second capital increase of TenPay since this year.

According to Huang Dazhis analysis, the regulation that the proportion of capital contribution shall not be less than 30% has a certain impact on the individual network small loan companies in the head, because in the whole joint loan market, ant joint loan accounts for 90% of the market share.

Tiger securities investment research team believes that under the 30% investment ratio limit, the profit prospects of the whole industry will be weakened, and the credit asset risk will be greatly reduced, and the default risk will be reduced.

Fully included in the scope of supervision, the online loan industry is facing reshuffle

The draft has seven chapters and 43 articles, which are divided into general provisions, business access, business scope and basic rules, business management, supervision and management, legal responsibility and supplementary provisions. Each of them can be described as a heavy blow for the Internet microfinance industry, and with the gradual tightening of the regulatory fence, the tightening curse of the network microfinance industry is also gradually tightening.

At present, the regulatory authorities have imposed certain restrictions and management on both sides of the network micro loans, especially the joint loans, which is a systematic regulatory framework. Yin Zhentao said.

At present, small loan company loans have been fully included in the scope of limited supervision, and private lending has no way to be included in the scope of supervision because there is no license plate or entity. At present, the regulatory authorities can only bring these licensed and fund institutions into the scope of supervision. It is very good to be able to do this. Guo Tianyong said.

In the view of many industry insiders, the biggest highlight of the draft is to strengthen the principle of protecting borrowers and require lending institutions to attach importance to the proper management of borrowers, which is a core principle of Inclusive Finance.

The draft has clear requirements in many aspects. For example, the small loan company operating the network small loan business should reasonably determine the loan amount and term according to the borrowers income level, overall liabilities, asset status and other factors, so that the borrowers repayment amount in each period does not exceed its repayment ability, and restrict the balance of individual network micro loan to natural persons to the people Within RMB 300000, it shall not exceed one third of the average annual income in the last three years. It is prohibited to induce the borrower to be excessively in debt, to collect loans by means of violence, intimidation, insult, slander or harassment, to collect, store and use customer information without authorization or consent, to illegally trade or disclose customer information, etc.

Whether consumers can enjoy the benefits or not depends on what the institutions do. Theoretically speaking, after the regulatory threshold is set, the operating cost will rise. There may be some institutions that let the wool go to the sheep instead, and the money collected from consumers will further increase, making the interest rate higher. Theoretically speaking, this possibility is not ruled out. Guo Tianyongs analysis.

In this regard, Guo Tianyong believes that in the future financial technology regulatory environment, regulators still hope to manage in accordance with the principle of substance over form, financial technology, not financial technology, whether it is Internet enterprises or traditional financial enterprises, as long as they are engaged in the same kind of financial business, they will implement the same benchmark regulatory standards..

To guide the direction of financial science and technology, it is very important to give full play to the characteristics of small amount inclusive, not to say that financial technology is not completely abandoned, but to make it more standardized development. From this perspective, there is still a lot of room for the development of financial technology in the next step. Regulation also needs to keep pace with the times, and we cant use the traditional understanding and perspective to supervise new things, Yin said. In addition, it is very important to always protect the rights and interests of consumers, no matter what kind of products you produce and what kind of regulatory methods are