Cleanup of lending platforms to better serve small enterprises

THE STATE COUNCIL, China's Cabinet, began asking for online lending platforms to rectify their behaviour two years ago, aiming to limit the growing risks. But both the investors and platform owners, blinded by the potentially exorbitant returns from what is a de facto usury business model, have simply ignored the authorities' warnings and continued to expand their funding and lending scale. People's Daily comments:

Investors should be realistic and not be tempted by the abnormally high returns promised by the cash-thirsty lending platforms.

The rupture of the online lending platforms' capital chains is predictable as their debtors are mostly small enterprises that cannot secure financing from banks and face difficulties making ends meet and other high risk money-making activities.