Chinese P2P lending regulation...too little too late?
Two stories this week remind us of the rather shambolic state of online P2P lending in China. Firstly, struggling lender, Chinatou, announced its intention to settle its $35m debt with investors using baijiu (liquor) instead of cash; secondly, a sad story of desperate Chinese women being forced to send naked selfies to secure their loans. The Chinese P2P lending space saw explosive growth in a largely unregulated market, with the government initially taking a hands-off approach to promote alternative sources of funding for consumers and small businesses. This level of growth pushed the value of the relatively new market in China to $67bn last year. However, stories such as these, not to mention spectacular failures such as the $7.6bn Ponzi scheme uncovered at one-time market leader Ezubao earlier this year, have resulted in closer scrutiny from the authorities, albeit too little too late for many investors.

BEIJING — Women in China are sending naked photographs of themselves holding their ID cards to peer-to-peer lenders as collateral, Chinese state media have reported, in a trend that may involve thousands of people.

The phenomenon, which the Beijing Youth Daily said was taking place on a popular online peer-to-peer lender called Jiedaibao, is provoking alarm and sympathy on social media. It has also led to calls for women to protect themselves from predators who are reportedly blackmailing them with the nude photographs, sometimes demanding sexual services when the women cannot repay at interest rates that can be as high as 30 percent a week.

A call seeking comment to Jiedaibao, a leading company in China’s flourishing peer-to-peer lending market, was not answered late on Wednesday in Beijing.

Beijing Youth Daily, the official newspaper of the Communist Youth League, said the practice was an “open secret.”