Consumer Finance Era

In comparison with developed countries, China’s consumer finance sector started late, in 2009, but it has been booming ever since. The consumer finance market is expected to reach 37.4 trillion yuan (US$5.6t) and internet-based consumer finance is expected to reach 3.4 trillion yuan (US$490b) in 2019, according to iResearch Consulting Group. Consumer finance enterprises are mainly non-banking financial institutions providing loans for consumption, but due to the incomplete personal credit information system and the lack of sound risk management and control mechanisms, the government has recently tightened regulation of the market, meaning that several of China’s biggest licensed consumer finance enterprises have seen slower profit and revenue growth. Insiders argue that online financing enterprises with weak reputations and funds have to come up with new business ideas and provide more offline scenarios in order to survive.