Only one out of the nine peer-to-peer lendingcompanies in China might be able to survive as topfinancial regulators are stepping up the pace ofscrutiny to curb risks caused by the massiveunregulated sprawl in the past few years.
The central government plans to maintain "pressingposture of severe attack" to clamp down onactivities violating laws and regulations in internetfinance, extending the ongoing nationwide crackdown for another year, Pan Gongsheng, deputy governor of the People's Bank of China, the central bank, said last Monday.
The two-year cleanup of the industry was necessitated by a series of scandals that sawinvestors lose huge amounts of money.
His comments echoed earlier remarks by Sun Guofeng, head of the research institute of thecentral bank, who warned that financial risks are now spreading from traditional sectors to theemerging fintech sector, increasing the risks associated with online cross-region loanoperations.
"Regulators at local levels should adopt new technology such as cloud computing to enhancecapabilities in protecting against and resolving cross-market financial risks," he said.
Many companies may find it hard to survive in the coming months amid the strong push toclean up the sector coupled with pressure from the recent liquidity crunch and an expectedlarge amount of withdrawals.
But some experts consider such a scenario expected and normal.
"The number of companies may shrink to only around 200 to 300," said an expert with aleading internet finance institute.