Firms explore secondary market for P2P lending in China

The entrance to China Central Depository and Clearing Corporation


Chinese companies have begun exploring the possibility of establishing a secondary market for the country’s peer-to-peer (P2P) lending business, including the possible entry of a state-owned enterprise, Shanghai’s National Business Daily reports.

Wangdaizhijia, one of the major P2P lending websites in China, recently launched a secondary online marketplace called Touzhijia, which helps investors with extra funds to find borrowers, the paper said.

“From an investor’s perspective, a secondary market across all platforms is needed,” said Hu Xin, a co-founder of another P2P lending service, PPmoney.
The report cited China Central Depository and Clearing’s job openings for two positions related to P2P businesses last November and speculated that the state-owned enterprise may be also considering entering the sector.

China Central Depository and Clearing declined to comment on the purposes for the planned hiring, the newspaper noted.

A secondary market has been discussed in the sector for some time as a solution to the lack of liquidity of loans, the report said.

However, Wangdaizhijia chief operating officer Shi Pengfeng told the newspaper that its new Touzhijia service is not meant to address the liquidity issue, since issues remain to screen sellers of loans. “Sellers of loans should be limited to professional investors who are capable of managing and spreading risks, as well as selecting good investments…for other investors,” Shi said.

Shi said Touzhijia mainly plays the role of helping investors to pick loan packages to put their money into.

On the other hand, Hu told the newspaper that the other solution is to match investors with loans within each service, which has been adopted by PPmoney.

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