Our website publishes news, press releases, opinion and advertorials on various financial organizations, products and services which are commissioned from various Companies, Organizations, PR agencies, Bloggers etc. These commissioned articles are commercial in nature. This is not to be considered as financial advice and should be considered only for information purposes. It does not reflect the views or opinion of our website and is not to be considered an endorsement or a recommendation. We cannot guarantee the accuracy or applicability of any information provided with respect to your individual or personal circumstances. Please seek Professional advice from a qualified professional before making any financial decisions. We link to various third-party websites, affiliate sales networks, and to our advertising partners websites. When you view or click on certain links available on our articles, our partners may compensate us for displaying the content to you or make a purchase or fill a form. This will not incur any additional charges to you. To make things simpler for you to identity or distinguish advertised or sponsored articles or links, you may consider all articles or links hosted on our site as a commercial article placement. We will not be responsible for any loss you may suffer as a result of any omission or inaccuracy on the website.

China sets higher bar for consumer finance companies

by Staff GBAF Publications Ltd
0 comment

China sets higher bar for consumer finance companies

BEIJING (Reuters) -China has changed the rules for consumer finance firms for the first time in a decade, setting a higher bar for non-bank financial businesses providing small personal loans in the world’s second-largest economy.

The stricter measures, which will take effect on April 18, come amid a regulatory tightening across China’s financial sector, despite the economy’s wobbly post-COVID recovery, and analysts see them as potentially deterring new players.

The revised rules, published by the National Financial Regulatory Administration (NFRA) after a one-month consultation ended mid-January, are in line with the proposed amendments.

Under the new regulation, firms that provide consumer financing for other than home and car purchases must have a minimum registered capital of 1 billion yuan ($139 million), more than three times the minimum 300 million yuan required under 2014 regulation.

A major investor in a consumer finance firm must also hold a stake of at least 50%, up from 30% previously.

Financial institutions that are major investors must have total assets of at least 500 billion yuan by the end of the most recent fiscal year, up from 60 billion yuan previously.

A non-financial major investor, meanwhile, needs to have at least 60 billion yuan in operating income in the most recent fiscal year, double the previously required number.

($1 = 7.1981 Chinese yuan renminbi)

(Reporting by Qiaoyi Li and Ryan WooEditing by David Goodman and Mark Potter)