Surge in P2P scams leads to stronger supervision

The number of Peer-to-Peer (P2P) online lending platforms has grown rapidly in 2015, as has the amount of problematic P2P platforms and even P2P scams, according to the 2016 bluebook of Internet Finance Development issued on Friday.

It has revealed that in 2015 there were 2595 normal running P2P online lending platforms nationwide -- a 65 percent increase compared to 2014.

However, as of the end of last year, 1263 P2P platforms had exposed operation problems, compared to just 367 before 2015.

In 2015, 55 percent of the 896 problematic P2P online lending platforms were P2P scams that the platform operators absconded with the money collected from the platform, which negatively influenced the P2P online lending service and the Internet Finance industry.

"Some people take advantages of the tolerance of internet finance administrative authorities, which resulted in a series of scam cases that should not take place," said Ma Delun, president of the Banking Accounting Society of China and former vice-governor of the People's Bank of China, at the Internet Finance Innovation Forum.

Frequently exposed P2P scam cases drew the administrative authorities' attention. Guidance in promoting the healthy development of internet finance, which is called the "Basic Law" of internet finance, was issued in 2015. Several internet finance administrative authorities also successively carried out a series of supervision and management regulations last year.

The industry considers 2015 the beginning of internet finance supervision, the bluebook noted.

The report points out that in the future, supervision authorities will further regulate access and exit mechanisms in the internet finance industry, developing internet finance to serve real economy and inclusive finance, and improve credit information system to enhance the information transparency of internet finance.

The report also suggests supervision authorities to accelerate construction of the online lending industry's central database, enhance coordination among various financial supervision authorities and establish online lending investor protection mechanism.

"We should guide the 'corner overtaking' of internet finance under the premise of compliance and safety", said Yang Zaiping, executive vice-president of the China Banking Association.