In fact, in the huge Chinese P2P lending market, which counts more than 2000 players and an approximate $48 billion, the loans used for leveraged share purchases represented a consistent part of the local total market, which notably is still developing in a grey area.
China’s securities regulator have now tightened scrutiny of trading on margin including borrowing money to buy stocks—outside of approved channels as part of wide-ranging efforts by the government to stabilize share prices. This led many operating peer-to-peer companies to announce the withdrawal of such type of loan from their marketplaces.
Although a small one, this is another step towards a more transparent and regulated alternative finance market in China.
China P2P Lenders in Cross Hairs as Regulators Curb Share Loans. Bloomberg.com (2015)
About the author- Irene Tordera
Born and raised in Milan, Italy, Irene is an International Business graduate, with a strong interest for innovative ideas that can simplify our lives.
During her studies, she co-founded an online community for sportspeople and worked in marketing positions at Ogilvy & Mather Advertising and at the European Business Angel Network, in Brussels. She is a passionate blogger about crowdfunding and the startup ecosystem.