The Fantastical World of Chinese Marketplace Lending Promotions One of the fundamental differences between Chinese and US lending platforms can be found just by examining the home pages of their websites. Most, if not all, US platforms’ landing pages are targeted at borrowers and exhibit mainly information around borrowing whereas on those of Chinese platforms, the information displayed on the home page are designed to attract new investors. In most cases the landing page directly lists the notes or wealth management products available for sale. Since US platforms rely primarily on institutional funding for loans, the need to attract and source borrowers has a higher priority in their overall marketing strategy than acquiring individual investors. The opposite is true for Chinese platforms: the lack of institutional funding has driven platforms to utilize a myriad of promotional and gamification strategies to acquire and retain individual investors. MORE +



Monthly Roundup: Chinese Fintech Deals Founded in 2013, Hepan Finance (http://www.hepandai.com/) is a P2P platform focused on providing operating capital to small businesses in the Shanghai area. Prior to launching the lending platform, the company’s experience and expertise was primarily in value assessment and foreclosure of real estate properties. This experience has transferred to the P2P platform’s ability to confidently control risk and deal with collateral assets after default. On the investor side, the platform offers a 12% return for its 12-month wealth management product, which recently decreased from a 15% return in early 2016. The 1-month short-term product provides a 7.2% return. According to its website, Hepan has managed RMB 2.4 billion in investments and has over 220,000 registered investors. MORE +



Regulations Galore Part II: Online Lending in China The China Banking Regulatory Commission (“CBRC”) issued the highly anticipated draft rules for online lending on December 28, 2015. Ever since the State Council guidelines (“the Guidelines”) for the Chinese internet finance industry were issued in July, rumors about the timing of the online lending rules have been circulating before the big announcement finally dropped at the end of last year. MORE +



Are Chinese Platforms Abandoning the P2P Model? Following in the footsteps of Chinese internet giants such as Alibaba, Tencent, and JD.com, leading Chinese P2P platforms have begun evolving into one-stop wealth management platforms. MORE +



Woes with Chinese Custodian Banks When the State Council of China issued its guidelines for the internet finance industry in July, the single most talked about guideline among platform operators is the government’s encouragement of banks to provide custodian services for investor funds used for platform transactions. MORE +



Chinese Online Lenders Need to Have Flesh in the Game Last month I attended LendIt Europe in London (Oct. 20-21) to learn more about developments in the marketplace lending industry in the UK and in broader continental Europe. LendIt has once again done an excellent job organizing the conference and brought together a wealth of information conveyed through thoughtful and open conversation. Fincera will be a gold sponsor at LendIt USA 2016 in San Francisco, and we look forward to sharing our experiences at this flagship event. MORE +



Regulatory Roundup Part III: Draft Regulations for Online Payments At the end of July, China’s central bank issued a set of draft regulations on online payments for public opinion, which recently concluded at the end of August. The draft rules were hailed by industry players and media as the “harshest rules in history” targeting the third-party payment industry, or non-bank organizations conducting payment-related operations. The central bank purports that the broader context or purpose of these draft rules is to improve consumer protection and reduce payment-related risks such as fraud. However, the industry views these rules as a protectionist move by the central bank that benefits banks in an attempt to stifle growing usage of online transaction services offered by third-party payment platforms (including mobile payments). MORE +



If Netflix Started Offering Loans Last week, Chinese online streaming media provider LeTV (SZE:300104) announced that former Bank of China Executive Director Yongli Wang will be joining LeTV to head its internet finance business. If this happened in the US, it would be the equivalent of a managing director or senior ranking officer of Bank of America leaving to head the internet finance division of Netflix. MORE +