China is said to start fresh round of checks on P2P lenders

China has started a new round of checks on thousands of peer-to-peer (P2P) lending sites, according to a document obtained by Bloomberg News, as authorities continue their efforts to clean up the industry.

Regulators are trying to steadily resolve risks by guiding some firms to exit the business, according to the August 13 document issued by the Internet Lending Financial Risk Management Working Leadership Group and co-signed by the China Banking and Insurance Regulatory Commission.

The checks, which include self-review by P2P firms as well as inspections by local financial regulators, must be completed by the end of the year, the document said.

“This is good for the industry because there’s been a lack of regulation,” said Chen Shujin, a financial analyst at Huatai Securities in Hong Kong. “The policy direction now gives more certainty to the P2P industry that the good ones will be able to survive.”

China’s clampdown on financial risk has weighed on P2P platforms for the past two years, but the pressure on the US$139 billion industry has intensified in recent months after the country’s credit markets tightened and the banking regulator issued an unusual warning to savers that they should be prepared to lose all their money in high-yield products.