Arab Today, arab today parent of china p2p lender raises 130m
Last Updated : GMT 17:03:51
Arab Today, arab today
Arab Today, arab today

Parent of China P2P lender raises $130m

Arab Today, arab today

Arab Today, arab today Parent of China P2P lender raises $130m

Beijing - XINHUA

Beijing Renren Youxin Investment Co. Ltd., which runs the leading peer-to-peer (P2P) lender Renrendai.com, on Thursday said it has raised 130 million U.S. dollars from the first round of financing. The investment was made late last year by a group of investors led by TBP Capital, a private equity firm with funds from foreign investors that targets Chinese companies, Zhang Shishi, who helped found Renren Youxin, told a press briefing. This was the largest single investment for the P2P lending industry, Zhang said. The fund will be used to cultivate talent and optimize products, to boost risk management and to make strategic mergers and acquisitions at a proper time, Zhang said. The investment, following similar capital injections into several other major P2P lenders, is a clear indication of the growing interest by venture capital and private equity firms in the burgeoning P2P lending industry. Li Shujun, a partner of TBP Capital, said he believed that the robust growth of Internet finance is a major trend with rises in household incomes and more allowed lending channels. Renrendai.com, which was established in 2010, has extended 2 billion yuan (330 million U.S. dollars) of loans over the past years, with only 0.6 percent of all overdue. Increasingly more P2P lenders, however, face operation problems, putting the investors' money at risk and prompting calls for tougher regulatory supervision. According to "Wangdaizhijia" (home of online lending), a Chinese P2P lending portal, 74 P2P lenders went bankrupt or encountered capital chain problems last year. The number of P2P lenders in China was expected to exceed 800 with a yearly turnover of 100 billion yuan by the end of 2013, according to Xu Hongwei, a senior executive of Wangdaizhijia. Competition among P2P lending firms push the lending rates up by up to 20 percent. Some firms even offer a 48 percent annual return to woo investors which increased the default risks for borrowers, said Xu. P2P lending is the practice of lending money to unrelated individuals and small businesses without going through a bank. This lending takes place online on P2P websites with an average yearly interest rate of 15 to 20 percent, more than twice China's official benchmark. As individuals and small companies have difficulty getting credit from banks, P2P lending with simplified credit checks offers an easier alternative. It also offers a good investment channel for the middle class as they can normally get three or four times the return on bank deposits.

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Arab Today, arab today parent of china p2p lender raises 130m Arab Today, arab today parent of china p2p lender raises 130m

 



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