P2P lenders may get boost from development of Greater Bay Area
May 22, 2019 (China Knowledge) - China’s peer-to-peer (P2P) lending industry is expected to get a boost from the development of the Greater Bay Area after having undergone a massive consolidation amid a government crackdown on the industry.
The development of the Greater Bay Area (GBA) which is a plan put forth by the Chinese government to turn 11 cities in the Peal River Delta including Hong Kong, Macau, Shenzhen and Guangzhou into a tech powerhouse to rival Silicon Valley and the Tokyo Bay Area.
This development is expected to be capital intensive and P2P platforms will likely turnout to be important players in providing the financing needs of small and micro companies as despite the governments push for banks to provide more lending to these companies, any increase in lending has been limited, leaving P2P lenders to fill the gap.
As the area shifts from a manufacturing to services-oriented economy, more start-ups and small and micro companies that find it difficult to borrow from traditional banks are expected to enter the market.
Moving forward, regulations on the country’s P2P industry will shift towards transparency and ensuring sustainability in the sector as weaker players in the market get “weeded out” by the ongoing crackdown.
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