china

on the rebuildingsociety.com blog

20th Apr, 2016

Leeds Welcomes Chinese Crowdfunding Delegation from Guiyang

It was with pleasure and excitement that I accepted Joanne Lavan’s invitation to present to her Chinese delegation from Guiyang earlier this month.

I’ve been fortunate enough to enjoy a few international trade missions, thanks mainly to my past work with Web-Translations, so I know the value of these types of exchanges.

Crowdfunding is in its infancy in China, so many are keen to learn from more mature markets, including the challenges we face and how we plan to overcome them. As one of the early P2P lending platforms, rebuildingsociety has seen a few ups and downs. During a meeting with the delegation, Kylie presented the role the regulator played in consulting with industry and shared examples of our responses to the consultation papers, which were ultimately used to help shape the compliance requirements of our new industry.
(more…)


07th Mar, 2016

P2P Weekly: The latest on China, and other news

“China jails 24 after 230,000 investors defrauded,” via Financial Times

Perpetrators of a massive scam that robbed primarily retail investors of $1.5 billion have received jail time. The Guangdong Bangjia Leasing Co. has spurred concerns about the limited regulation of China’s online lending industry — recently, P2P lender Ezubao was embroiled in scandal when 21 of its officials were arrested for fraud.

“Chinese Peer to Peer Lending Industry Does Not Need More Rules,” via Crowdfund Insider

Enforcing existing laws is more likely to solve China’s fraud problem than adding new ones, says one expert. Spencer Li says: “There are sufficient laws and policies currently in place that allow the government to investigate and prosecute fraud cases such as Ezubao, but the lack of vigilant enforcement is the reason similar schemes continue to operate.”

“‘I’m happy to accept a higher risk for a higher return’: How peer-to-peer Isas lend edge to investing,” via This Is Money

A comprehensive look at the forthcoming Innovative Finance ISA and how it will benefit lenders plugged into the P2P market.

Dynamic Pricing in Alternative and P2P Lending” via The Financial Brand

“Our prediction is that alt lenders will start to offer new, non-lending products. If so, then the door to dynamic pricing swings ever wider and we will see bundled offerings that can be relationship priced.”


25th Jan, 2016

P2P Weekly: A Look at the Evolving Lending Market, and Other News

“The Evolving Nature Of P2P Lending Marketplaces,” TechCrunch

The world of P2P lending continues to adapt and grow, with bigger investors and even banks getting in on the action. This article from TechCrunch takes a broad look and offers feasible predictions for the future.

“The sharing economy probably means much less inequality, not more,” The Telegraph

Fintech and crowdsharing markets could lead to a new economic structure — and perhaps a much more horizontally distributed one.

“Taking flight: The allure and the peril of Chinese fintech companies,” The Economist

The Economist breaks down the Chinese P2P market, which is one of the fastest growing and most fraught in the world. Nearly 1/3 of companies have had major problems, so the Chinese government is rolling out new regulations. Despite high risk, the market appeals to investors around the world who want to get in on the ground floor of an exploding market that is quickly expanding its reach internationally.

“Regulations Galore Part II: Peer to Peer Lending in China,” Crowdfund Insider

A careful look at the aforementioned regulations on Chinese lending.

“FCA Publishes Consultation on Loan Based Crowdfunding. Agency Seeks to Simplify Client Money Requirements,” Crowdfund Insider

“According to the FCA, presently an investors money held in relation to peer to peer loans must be segregated from the firms own money and any other assets. The regulator agency understands that some debt based platforms find this process burdensome as many P2P lenders have not developed systems to easily segregate funds between P2P or B2B lending agreements. The FCA is proposing to allow firms to elect to to hold both kinds under CASS 7, if they wish to do so. Firms may then segregate P2P and B2B monies together, but separately from the firms’ money, without breaching CASS 7.”


04th Jan, 2016

P2P Weekly: Lending Future is Bright in China, and Other Stories

“China Lays Out Rules for Peer-to-Peer Lending Platforms,”
Wall Street Journal

The China Banking Regulatory Commission has released rules for the P2P lending industry and is seeking public comment. Clearer regulations for the more than 2,500 P2P lending operations in China have been in the works for a while, and 2016 should be a big year for the industry in that country.

“Report: China P2P Lending Topped $150 Billion in 2015,” Crowdfund Insider

The P2P lending industry in China generated more than £100 billion in 2015, according to Chinese news reports. This indicates a high level of interest from the public in this industry, since P2P lending gets almost no institutional money in the country.

“Peer to peer lending is set to explode,” Business Insider

Writes John Mauldin: “I’ve been a fan of private credit for a long time. Recently, I have once again been exploring the private-credit world, and it seems this market is growing faster than I had thought.”

“RBI plans guidelines for peer-to-peer lending,”
The Economic Times

The Reserve Bank Of India plans to develop guidelines to regulate the burgeoning P2P industry.

“They should be regulated under the State Money Lenders Act,” said Raman Agarwal, chairman of Finance Industry Development Council. “On these platforms, lenders are individuals and State Money Lenders Act applies to individuals, and not entities. In this case, individual is not an individual lender but a camouflaged lender.”

“Funding Circle passes £1bn lending milestone,”
The Guardian

Funding Circle surpassed £1 billion lent in 2015 and is on track to lend a further £1 billion in 2016.


21st Dec, 2015

P2P Weekly: Lending Totals Doubled in 2015, and Other News

“BondMason Reports P2P Lending Doubled to £2.3bn in 2015; Offers Up 3 Predictions for 2016,” Crowdfund Insider

According to BondMason, UK P2P lending totals doubled in 2015 to about 2.3 billion. The savings and investments platform estimates another £1-1.5 billion in growth in 2016.

“Spotify and Apple Music Should Let Us Tip Musicians We Love,” Wired

Eric Steuer argues that streaming platforms like Spotify and Netflix, which deliberately don’t give much money to creators, should make it easier for users to throw a few bucks in the artists’ direction.

“China overtakes UK in global fintech race,” Financial Times

China is home to seven of the world’s 50 most successful fintech firms, according to a list compiled by accountancy group KPMG. The list included six British firms, with Funding Circle ranking 5th.

“For Large Investment Banks The Rise Of FinTech May Help Alleviate Cost Pressures,” Forbes

Writes Antoine Gara: “Now, FinTech is increasingly seen as a way cut through this technological muck, saving far more money than a next round of layoffs, or re-locations from New York City to Salt Lake City. These investments are seen as the next frontier of cost cutting on Wall Street. And it appears firms that once used to compete fiercely against each other are willing to join forces in the FinTech arms race.”


14th Dec, 2015

P2P Weekly: A Closer Look at the Innovative Finance ISA

“Will the Innovative Finance ISA Allow Only a Few P2P Lenders to Participate?,” Crowdfund Insider

Deeper analysis of the Innovative Finance ISA indicates that only fully regulated P2P lenders can participate in the innovative ISAs. You can see the draft documents at the link.

“More closures seen among Chinese peer-to-peer lenders as new rules loom,” Reuters

Ezubao, the largest P2P lender in China based on lending figures, is being investigated for potentially illegal activity. So far this year, 824 lenders have shuttered.

“The Evolution Of Fintech,” Forbes

Forbes offers a useful summary of the fintech industry’s history. This is the first of two pieces.


07th Dec, 2015

P2P Weekly: US Update

“Dimon Says JPMorgan Plans Service With Peer-to-Peer Lender,” Bloomberg

JP Morgan Chase’s CEO has indicated the bank is looking to form a partnership that will allow the bank, the largest in the U.S., to add peer-to-peer lending to its portfolio of products and services.

“Are Chinese Platforms Abandoning the Peer-to-Peer Model?” Crowdfund Insider

P2P lenders in China are evolving into wealth management platforms that offer a broader range of programs. Lenders are taking different approaches to incorporating P2P into other services or consolidating various existing programs.

“Funding Circle’s peer-to-peer trust raises £150m in London Stock Exchange listing,” The Telegraph

Funding Circle is bringing P2P to the wider investment community for the first time.

“This vehicle will allow any investor to buy a ticket and get access to Funding Circle loans globally,” Funding Circle chief executive and co-founder Samir Desai said recently. “We want to be part of the global financial infrastructure.”

“Bank of England’s Funding for Lending Scheme extended,” Financial Times

“Monday’s move signals that while the BoE is increasingly nervous about a potential credit bubble in mortgage and consumer finance markets, it is still concerned about banks’ reluctance to lend to small businesses,” explains Martin Arnold of Financial Times.


30th Nov, 2015

P2P Weekly: FinTech Growth

“Banking facing ‘Uber moment’, says former Barclays boss,” The Guardian

Technology continues to strengthen new banks and alternative finance, while traditional banks are at risk of falling behind, said Anthony Jenkins to Reuters. Jenkins was ousted from Barclays in July.

“Chinese Online Lending Startup Dianrong To Expand Into South Korea,” Wall Street Journal

One of China’s biggest peer-to-peer lenders will partner with a Seoul-based conglomerate to bring the Chinese company’s technology to South Korea’s financial industry.

“Scammers are trying to extort the customers of hacked crowdfunding site Patreon,” Business Insider UK

Patreon users exposed in a September hack are now being extorted by scammers who claim to have extensive data on those users. Patreon executives have urged users to ignore the messages.

“China Report: Bank Executives are Fleeing to FinTech Companies,” Crowdfund Insider

Several executives of high profile Chinese banks have turned to jobs in fintech after salary caps in the banking industry made it less attractive.


08th Nov, 2015

P2P Weekly: Gender Diversity Fuels P2P Success, and Other Stories

“‘Our Gender Diversity Is Absolutely A Factor In Our Success’: Q&A With Krista Morgan, CEO & Co-Founder Of P2Binvestor,” Crowdfund Insider

Says Morgan: “It’s a challenge to hire a diverse team, and it’s almost impossible if you’re not paying attention. After two years of building P2Bi I felt confident that I had found my own system for hiring the best people who were also diverse and wanted to share it since it’s such a huge issue. I’m hugely proud of the fact that P2Bi is 50 percent female across our company including our leadership team, which is extremely rare in tech and even more rare in finance.”

“SC to unveil peer-to-peer lending framework,” The Star Online

The Securities Commission in Kuala Lumpur will introduce a P2P framework next year. Leaders hope the program, called afFINity@SC, will encourage the growth of finance and investment innovation.

“How changes to EIS could affect UK small business funding,” GrowthFunders

Changes to the Enterprise Investment Scheme outlined earlier this year by Chancellor George Osborne will go into affect later this month. The changes lower both the age a participating company can have (seven years instead of 10) and the amount that investors can put into one company (£12 million instead of £15 million).

“Brief: Another Record Set in China P2P Lending for October,” Crowdfund Insider
Amid changes to regulations and other challenges, P2P lending in China continues to set records. So far this year, the industry has lent more than 1 trillion yuan, or about £1 billion.


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