Peer-to-Peer Lending in China

In performing our due diligence of smaller companies, we sometimes run across peer-to-peer lending (P2P lending). It’s a concept that wasn’t prevalent when we started in China in 2003, but it’s since become a significant source of financing for small companies who can’t obtain bank loans as banks tightened their credit policies and focused their lending efforts on larger companies and state-owned enterprises. Peer-to-peer lending is a fast growing financial segment that first began in China in 2006. In P2P lending an intermediary, or microfinance company, connects lenders and borrowers for a fee, ranging from 1% to 4%. Lenders, seeking … Continue reading Peer-to-Peer Lending in China