The new blacklist comes after a string fraudulent sites went dark and high-tailed it with lenders’ money, including one just last week. Over 100 such sites have absconded or went bust in recent years, with an estimated US$110 million lost in under half a year.
NBD estimates China now has about 2,000 P2P lending sites. The trend exploded since it was introduced in 2011 as a way for average people without much credit history to get small personal and business loans. The government even encouraged P2P lending businesses to take up residence in its local tech district, promising perks like lower rent and cash rewards. But regulators have left these services largely untouched despite many experts’ advice, resulting in widespread fraud.
While the young industry has been a godsend for many Chinese people in need of a quick loan, legitimate sites like Wangdaizhijia, PPDai, Dianrong, and Renrendai are being drowned out by the huge drove of scammers and blundering newcomers looking to make a quick buck.
In NBD’s report, Baidu says it will work with authorities, insurance companies, and the payment clearing association to come up with a list of reputable lending sites. It has reportedly removed both sponsored and non-sponsored P2P lending sites from its search results for the time being, but many still remain.
Baidu’s crackdown also comes conveniently on the heels of launching its own lending services. The company rebranded its financial arm last week, adding personal loans to the mix.