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Popular P2P lending platform suspends operation

Writer: Zhang Yu  | Editor: Lily A  | From:  | Updated: 2018-07-12

QIANBABA, a Shenzhen P2P lending platform that had been operating for five years, released a notice Monday evening announcing that the platform would suspend operation from Tuesday due to a capital crunch, the Shenzhen Economic Daily reported.

According to the notice, the cash flow difficulties of a number of P2P platforms in China have triggered investor panic, resulting in a large number of P2P users applying for withdrawals from the platform. At present, the Bao’an police have launched an investigation.

As to the suspension of business, the platform said it will try to pay back its users in an orderly manner. In addition, industry insiders estimated that the suspension may involve tens of thousands of investors.

According to a senior manager of the platform, the company has 2.5 billion yuan (US$379 million) in assets and its cumulative amount to be collected by its investors was 2.1 billion yuan. The manager, who wasn’t named, said the company will provide its investors a solution within three to five working days.

On the same day, another P2P lending platform called lqgapp.com also released a notice announcing the suspension of its operation. The platform said it will pay back its investors according to a six-phase scheme that will be completed in 2021.

According to Lu Shengyun, president of P2P lending platform qhziben.com, the closures of some P2P lending platforms have led to an unprecedented crisis in the industry. He suggested that the regulator roll out specific standards as soon as possible to guide unqualified platforms to exit the market in an orderly manner.

Lu is optimistic about the future of the industry. He believes that the platforms that remain in business must be competitive and have good investment projects.

It was reported that the clean-up and rectification of unqualified P2P platforms, which was scheduled to be completed by the end of this June, will be extended to June 2019.