Is funding drying up for China’s internet finance on tighter scrutiny?
Fundraising for internet finance platforms is declining, with the amount raised in September representing a 44pc and 55pc drop from August and July respectively
Chinese online lending platforms mostly declined on Wednesday in the A-share market, after data showed that the amount of funds raised for China’s internet finance platforms fell for a third straight month in September amid a regulatory crackdown.
The fundraising amount for internet finance platforms, including online lending platforms, cryptocurrency mining firms and blockchain-based payment system operators, dropped to 2.174 billion yuan (US$330 million) in September, representing a 44 per cent and 55 per cent drop respectively from August’s 3.86 billion yuan and July’s 4.85 billion yuan, according to latest estimates by Online Lending House, one of China’s largest internet financing data sites.
The financing deals for virtual currency-related start-ups had occurred before the Chinese authorities launched a crackdown on domestic trading in virtual currency in early September.
Meantime, the total volume of online lending, which includes loans from individuals to individuals or to businesses through online platforms, also shrank in September.
The number of transactions recorded by online lenders fell 2.2 per cent in September to 194.2 billion from August, with Zhejiang province posting a more than 40 per cent plunge, according to separate data from financing and loan service site rong360 on Tuesday.