A recent wave of failed P2P lending platforms in China has caused many investors to lose a lot of money. Some investors lost hundreds of thousands of dollars, which represented their entire retirement savings. What caused this to happen and should this trend in the world's largest P2P lending market worry investors in Singapore?
What Happened to China's P2P Lending Industry?China's P2P lending industry, which is the world's largest with total outstanding loans of approximately S$200 billion, experienced rapid growth in the past decade. In 2006, China's first online P2P platform launched and there were 2,388 active platforms at the start of 2017. These companies allowed underserved borrowers to receive financing from large groups of individual investors, which helped those borrowers that had reached their credit card limit or did not qualify for bank loans. For this reason, crowdfunded loans have been particularly popular with low-income groups
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