CreditEase Corp's bank deal will help safeguard investors

CreditEase Corp have reached an agreement with China Guangfa Bank to help safeguard investors on the company's lending platform Yinrendai.com.

Set up in 2012 by China's leading peer-to-peer lending and wealth management company, Yinrendai.com allows investors to loan money to users, similar to a bank.

The website has 4 million registered users with a trading volume of more than 5 billion yuan ($800 million).

Its risk reserve fund is valued at almost 100 million yuan and the deal by CreditEase Corp means that China Guangfa Bank will oversee supervision of settlements for investors and borrowers.

Tang Ning, founder and CEO of CreditEase, said this kind of agreement is ideal for China's booming Internet financial market by safely managing the risk to investors.

This is the second deal that the P2P company has put together in recent months. In January, CreditEase Corp reached an agreement with China Citic Bank, triggering similar moves from Hangzhou-based Tongbanjie, Beijing Renrendai Co Ltd and Jimubox.com.

In China, P2P Internet lending platforms have gone through a difficult period. Wang Yanxiu, an official at the China Banking Regulatory Commission, said last year that out of about 1,200 Chinese P2P lending companies 150 have folded, leaving investors out of pocket.