Peer-to-peer lending platforms require stricter supervision

IN THE FIRST half of this month, 71 peer-to-peer online lending platforms have closed down and some of the business owners have fled. The unprecedented wave of P2P lending collapses is causing panic in the entire industry. Guangming Daily comments:

Peer-to-peer lending, which used to be eulogized as an innovative, flexible and convenient financing tool, witnessed a robust increase in 2015, when its transaction volume exceeded 1 trillion yuan ($147.5 billion), nearly triple the amount of the previous year.

The financial administrative department's loose supervision, if not noninterference, facilitated the industry's rapid growth, because the regulators wished to make it into a financing tool to help small and micro enterprises, to which banks are reluctant to lend.