P2P lending growth slows amid new compliance rules

The growth rate of China's peer-to-peer lending transaction volume dropped by nearly half in 2016, as the industry faced reshuffling amid a slew of compliance regulations.

Last year, the transaction volume of P2P lending nationwide, which involves small businesses or individuals borrowing money from online investors, exceeded 2.8 trillion yuan ($403 billion), increasing by 138 percent from a year earlier. But the growth slowed down to slightly more than half of the growth rate in 2014 and 2015, according to a report by P2P001, a Shenzhen-based financial web portal, on Monday.

Industry experts said P2P lending companies have moved slowly toward enabling compliance regulations, fighting against what they see as challenges including the watchdog encouraging banks to provide custodian services for investor funds used for platform transactions. The China Banking Regulatory Commission and three other central government departments jointly issued interim measures for the administration of the business activities of P2P lenders on Aug 24 last year.