Shanghai to suspend microcredit lenders that target individuals
Firms that defy the rules could get hit with rating downgrade, suspension from launching new businesses or even license revocation
The Shanghai Financial Services Office has ordered microcredit lenders and financing guarantee companies to immediately suspend cooperation with rental agents that carry out “rental loans” targeting individuals, The Paper reported.
According to the office, some agents have cooperated with financial or non-financial institutions to make “rental loans” to tenants, causing a litany of problems — high leverage ratios, irregular fund operation, infringement on the rights of tenants and landlords and unnecessary heightened risk.
Companies that continue to carry out such business will face punishment, such as the lowering of their regulatory rating, suspension from launching new businesses or even the revocation of their business licenses.
Meanwhile, for those micro-loan companies and financing guarantee firms which have carried out the “rental loans” business before, they must report on the current situation of the business, indicate the number of borrowers involved as well as submit a rectifying plan.