Photo/Shetuwang

Nov. 28 (NBD) -- The number of China's peer-to-peer (P2P) lenders that are funded by listed firms and still run normally declined to 64 as of November 23, dropping by more than 34 percent within 11 months, according to the incomplete statistics from mobile financing platform Rong360.com.

Among those lending platforms, 22 are wholly-owned subsidiaries of listed companies.

As of November 20 this year, 34 P2P lending companies were reportedly facing operation problems concerning with liquidation, inability to offer money withdrawal service, loan extension, and police investigation.

As the P2P industry suffers a tough time, some listed companies started to retreat from the industry.

Rong360.com's analyst Fu Ying stated most of the top-level P2P lenders had not brought any actual profits to listed companies. 

The P2P segment now faces uncertainty in record-filling which is essentially a form of licensing and sees an increasing number of P2P platforms stuck in difficulties, which may cause losses to listed companies, Fu Ying explained, to sell out shares in P2P lending platforms or to retreat from the sector will be a choice for those listed companies.

Fang Song, chairman of Guangzhou Internet Finance Association, also commented companies desperate for a quick buck should make a retreat from the P2P industry since intensified supervision over the P2P sector will lead to great increase of operation costs and companies will not gain profits over a long period of time.

According to an industry insider, the participation of many listed companies in the internet finance industry is due to their intention of improving their market value. Around 70 percent of these listed companies are from traditional industries such as real estate, non-ferrous metals, healthcare, agriculture, as well as manufacturing, the insider noted.

When these industries were under downward pressure, internet finance, once enjoying booming development, became a straw for thoese firms to grasp at, the insider added. Therefore companies competing in the internet finance segment have neither experience nor technologies. 

The insider finally predicted there will be more companies retreating in the future.

Zhao Di, Chief Executive Officer of internet lending information platform Yixiangdai.com, thought the Matthew Effect will be observed in the P2P sector in the future. 

After small and medium-sized platforms and companies with disadvantaged business performance shut down, the capital will gradually flow to big platforms, he explained, at that time, the P2P industry is about to see a rebound.

Email: wenqiao@nbd.com.cn