A 71-year-old victim’s tale reveals extent of greed in China’s US$30 billion peer-to-peer lending fiasco
- About 6,000 peer-to-peer lending companies have defaulted on payments, absconded with cash or gone out of business as of the end of September
- China has lately taken harsher measures to tackle the P2P industry that is rife with fraud and mismanagement
The collapse of China’s peer-to-peer platforms, once touted as a model to reshape the nation’s financial landscape, has left millions of victims in financial ruin and despair.
Among them is Bao Jiaqi, a former state glassware company worker in Shanghai who deposited 300,000 yuan (US$42,900) in 2016 with a platform managed by Xinming Finance.
The 71-year-old retiree has spent the last two years chasing the now-defunct company and its executives for her money back, in vain, after the online lender went bust in 2017. More than 400 other victims have lost a combined 1.2 billion yuan in the blow-up, she said.
“It is a painful experience for most of us,” said Bao, admitting some guilt for being enticed by the juicy returns. “A business model that received the government support has eventually caused the little guys like us a huge bill.”
Nobody from Xinming could be reached for comment.
Tales of greed have emerged as the common thread in China’s explosive growth in internet-based lending. The business coexists alongside other under-regulated wealth products that lurk in the shadow of its banking ecosystem.