China’s Hebei province has shut down all peer-to-peer lending platforms, underlining the latest effort by regulators to clean up the industry rife with fraud and mismanagement. None of the 35 platforms in the region that had applied for administrative checks to continue their business met the relevant regulations, the Hebei government said in a statement on its official website on Friday. P2P companies that were not subjected to the check will be deemed as conducting illegal businesses and be banned as well, it said. The closure follows an earlier exit of 93 companies from the market, a separate statement said. Hebei has become the second province in China to outlaw the P2P business after Hunan , which imposed the ban in October, as authorities ramp up a drive to clean up the industry that is increasingly undermining the stability of the country’s financial system. P2P: China’s once-booming lending industry must close within two years About 6,000 P2P platforms have missed payments to investors, mostly individuals, stolen funds and suddenly suspended operations, putting more than 214 billion yuan (US$30.7 billion) of investments at risk. China last month required all P2P firms to be reorganised as small loan lenders within two years, according to a notice issued by China’s Internet Financial Risk Special Rectification Work Leadership Team Office. All the platforms need to clear their outstanding loans in less than 12 months before the revamp is made, while units with more than 5 billion yuan in outstanding longer maturity loans, the grace period can be extended to two years at most, Only 427 P2P companies were still in operation at the end of October, compared with a peak of 6,000 in 2015, according to the latest data from China Banking and Insurance Regulatory Commission. Ping An Insurance-backed Lufax also said it would pull out of the P2P market, one of the first signs that the tide was turning against Chinese lenders.