Loan sharks continue to prey on Chinese university students by going offline to bypass crackdown
A Shanghai-based company was found lending money to students through ads it had posted around university grounds, charging interest of up to 76 per cent
Predatory loan sharks are continuing to target Chinese university students, six months after authorities launched a national crackdown against the unscrupulous lenders, mainland media reported.
China banned online lenders from extending credit to university students in June, permitting a limited number of authorised banks to issue loans. Other online lenders were asked to withdraw from the business, according to a joint notice from the China Banking Regulatory Commission, the Ministry of Education and the Ministry of Human Resources and Social Security.
State-run China Central Television reported on Monday, however, that predatory lending was still flourishing on campuses. It said Dtxindai, a Shanghai-based consumer loan company, was found lending money to students through ads it had posted around university grounds, charging an extremely high annual interest rate of as much as 76 per cent.
A staff member told CCTV that the company originally targeted customers online but shifted to posting ads inside campuses after the crackdown was imposed.
Yiqianbao, an app developed by Qingdao Chengyang District Zhonghui Micro Loan Co Limited, was found to charge 7,899 yuan (HK$9,485) for a one-year loan on an original investment of 5,000 yuan, reflecting an annual interest rate of about 58 per cent.