China cracks down on online micro-lending firms

Companies providing micro-loans have expanded rapidly in the past year, partly due to loose government

China’s financial regulators have circulated new rules to local governments targeting fast-growing online micro-lenders, part of a campaign to rein in a rapidly developing financial sector.

Under the new rules, unlicenced organisations and individuals are not allowed to conduct a lending business, according to the notice.

Lending institutions are also not allowed to give loans to borrowers who have no source of income or to mislead consumers into over-borrowing, according to the notice.

The rules were devised by a multi-ministry body, tasked by the central government with bringing risks in internet finance under control. Beijing has zeroed in on the loosely regulated market