The China Banking and Insurance Regulatory Commission (CBIRC) and the People's Bank of China (PBOC) issued the proposed “Interim Measures for the Administration of Online Micro-lending Business” (Draft for Public Comment) (网络小额贷款业务管理暂行办法(征求意见稿)) on 2 Nov. 2020. The Measures aim to prevent risks in the online microlending business.
The Measures mainly target Ant Financial Services, a subsidiary of Alibaba, and other emerging Internet giants running the financial business in China.
The Measures require:
(1) An Online small loan enterprise (hereinafter "enterprise") shall be under supervision if it utilizes big data, cloud computing, mobile Internet, and other technical means to analyze and assess the credit risk of borrowers, determine the loan type and amount, and complete the loan-related processes online. (Article 2)
(2) Although an enterprise provides online services, it shall not run the cross-region business. (Article 2)
(3) If the funds of an enterprise come from the unstandardized financing, the financing balance shall not exceed one time of its net assets; if the funds come from the standardized assets of credit right, the financing balance shall not exceed four times of its net assets. (Article 12)
(4) The balance of loans granted by an enterprise to natural persons shall not exceed CNY 300,000 or one-third of its average annual income for the last three years. (Article 13)
Contributors: CJO Staff Contributors Team