On August 24, 2016, the China Banking Regulatory Commission held a press conference on the "Interim Measures for the Management of Business Activities of Online Lending Information Intermediaries".
This means that the P2P online lending industry’s first business standardization policy has been officially launched.
The "Interim Measures" were jointly issued by the Banking Regulatory Commission, the Ministry of Public Security, the Ministry of Industry and Information Technology, and the Internet Information Office. The regulatory requirements still continue to include the core contents of information intermediaries, small-amount dispersion, and negative list systems proposed in the draft for comments.
After Zhang Yida received the news, he rushed back to China immediately.
There are two P2P companies under his umbrella, Yimin Wangjin and Ruimin Financial Management, both of which need to take corresponding measures.
In a conference room, Zhang Yida summoned people from the two companies for a meeting.
“What do you think of the Interim Measures?”
Facing Zhang Yida's question, Fan Hongyang and Fang Yuhan looked at each other, and finally Fan Hongyang spoke first:
“I noticed that an article was added to the negative list, which clearly prohibits P2P from transferring claims, that is, P2P shall not engage in asset securitization business or transfer claims in the form of packaged assets, securitized assets, trust assets, fund shares, etc.
In addition, the prohibition on related-party transactions has been cancelled, and it has become a prohibition on self-financing and disguised self-financing; offline stores are also prohibited, and offline publicity and promotion of financing are prohibited.
Note that the "offline stores" here refer to the financial side stores, which means that offline P2P financial promotion is not allowed."
Zhang Yida nodded and sighed: "What specific impact will it have on Yimin Internet Finance?"
Fan Hongyang put on a straight face and said: "We don't have any offline capital stores, so it won't have any impact on us.
But prohibiting P2P from issuing ABS debt would have a huge impact on us. Originally, we were ready to issue the first ABS debt.
Now, all the preparation work done in the early stages was in vain.
Losing money on handling fees and audit fees are trivial matters. The biggest problem is that cheap funding channels are cut off.
In addition, trust funds cannot be connected.
Chengdu Bank also called and said that the financial cooperation has been slowed down."
"If it really doesn't work, set up a separate company as the main bank financing entity."
Fan Hongyang shook his head fiercely, "It's useless, our main business is P2P, and we have the reputation of being the first P2P stock.
Any small move will be observed under a magnifying glass by media reporters and even colleagues."
After hearing this, Zhang Yida couldn't help but smile bitterly. He had grabbed the title of the first mutual fund company, and it had indeed strengthened his brand appeal.
But if you want to wear the crown, you must bear its weight! It can be regarded as a backlash!
“If there is no issuance of ABS debt and funding from banks, trusts and other financial institutions.
It will cause us two problems: first, insufficient lending funds, and second, high cost of funds."
Zhang Yida took a long breath and asked: "What is the funding gap? And what is the current funding cost?"
Fan Hongyang replied: "At present, our company's balance to be collected is 41.2 billion yuan, and the annual loan volume is more than 60 billion. There is a credit fund gap of nearly 20 billion.
In terms of capital costs, it does not include online advertising, and only counts the interest issued by the platform, as well as various interest rate coupons and red envelopes. The average capital cost is between 10% and 10.5%.
Including online advertising, the capital cost is more than 12%."
“12%, plus employee salaries, various research and development expenses, and bad debt provisions.
The interest rate must be set at least above 20%, right?”
Fan Hongyang nodded and added: "Actually, the interest rate of 20% is not high. The interest rates of many peers have already reached 40 to 50%, or even more than 100%.
This does not include the group of people who lend online IOUs. I am referring to the peers of some scale, with monthly lending volume of hundreds of millions."
Zhang Yida waved his hand and said: "We can't compete with them. They just want to make a profit and run away without considering the brand at all.
We want to become a century-old store. Among other things, we must at least surpass Ali, which is said to have survived for 102 years and lasted for 3 centuries!"
Fan Hongyang laughed. Mr. Zhang was fucked by Ahri last time, and now he likes to use Ahri as an example to make fun of him.
"Yes, we have to consider the brand and the user life cycle."
Speaking of this, Fan Hongyang's expression changed and he solemnly said: "Mr. Zhang, we must raise the interest rates for some users."
"What's going on? Tell me."
Zhang Yida also knew that Fan Hongyang had a steady personality and was a person with a clear goal, and would not raise the interest rate without any reason.
“P2P started to rise in 2013, and online lending started in 2015.
Strictly speaking, consumer finance users are secondary users that banks do not want.
These people have very weak ability to resist risks and basically rely on their salary income to support their early consumption.
Once something changes, such as unemployment, industry downturn, or economic downturn, there will be problems with their repayment ability.
Even if these situations do not occur, the life cycle of a consumer finance user will not exceed 3 years.
If a person has poor self-control, he will easily lose himself after falling into the trap of consumption upgrade.
If you continue to borrow money for consumption, your ability to repay is getting worse and worse.
After my salary could not support the monthly loan repayments, I started to borrow new loans to pay off the old ones and cash out my credit cards.
Until the debt gets higher and higher, it will eventually "explode". This will also form a large credit bubble.
Because loans from banks and other financial institutions will be included in the central bank's credit report, P2P and general online loans are not eligible for this.
He may very well become the final taker!
My brother lent money from institutions like ours and used it to repay bank or credit card loans..."
"So what do you mean, raising interest rates is also to resist the subprime mortgage crisis that may break out in the future?"
Fan Hongyang waved his hand, "It's not that serious. As long as the manufacturing industry and low-end jobs are still there in our country, you can always find a job."
What I mean is to target these users who borrow frequently, squeeze out the last bit of use value, and then dump them to other financial institutions.
Otherwise, it is impossible for a borrower to use it only once when the cost of customer acquisition is high today."
That's too naked! Although this is true, including banks, it is inevitable that there will be some cruelty.
But this path is also chosen by some young people who do not know how to control their desires.
If you borrow money once or twice a year, you may start a business or encounter some difficulties.
People who borrow money every month either really have endless desire to consume, or they are really desperate.
Seeing Zhang Yida's silence, Fan Hongyang reminded him again: "Mr. Zhang, in our industry, you must not be idealistic.
If you are serious about your feelings, go for Huinong Loan.
The purpose of doing consumer finance is to make money. At the same time, as a P2P company, we are also responsible for the lenders on the other end."
"Okay!"
Zhang Yida also specifically reminded: “Pay attention to the interest rate, it must not exceed the 36% red line.
Even now, many people use the method of equal principal and interest, cutting off the principal and interest, to make a fuss.
We can’t do this either, so this is the final bottom line!”
"I know this. We won't even grant loans with an annual interest rate of 36% to customers who are too high-risk. We will directly reject them."
Zhang Yida looked at Fang Yuhan again and asked, "Where are you?"
Fang Yuhan smiled bitterly and said: "The upper limit of the loan balance of the same natural person on the same online lending information intermediary platform shall not exceed RMB 200,000;
The upper limit of the loan balance of the same legal person or other organization on the same online lending information intermediary platform shall not exceed RMB 1 million;
The total loan balance of the same natural person on different online lending information intermediary platforms shall not exceed RMB 1 million;
The total loan balance of the same legal person or other organization on different online lending information intermediary platforms shall not exceed RMB 5 million.
This means that P2P companies can issue loans of up to 200,000 yuan to individual borrowers and up to 1 million yuan to corporate borrowers.
The total amount of loans borrowed by individual borrowers from all P2P companies cannot exceed 1 million yuan, while the total amount borrowed by corporate borrowers from all P2P companies cannot exceed 5 million yuan.
This policy has a great impact on Ruimin Financial Management’s supply chain finance.
Our customers are all corporate customers, and loans of no more than 1 million yuan can only be granted to very small businesses.
The survival of such small companies is in question, and extending loans to them is very dangerous.
The state has repeatedly issued orders that banks should provide small and micro finance and support small and micro enterprises.
Why has this fallen on deaf ears?
This is because banks are more willing to grant a loan of 100 million yuan to a large enterprise than to each of 100 small and micro enterprises with a loan of 1 million yuan.
Moreover, it is best for this large enterprise to be a state-owned enterprise. If anything happens, the whole body will be left in the pot.
It is too difficult to control the risk of small and micro enterprises. The financial system at the beginning of establishment is not sound, and there is no way to conduct effective risk assessment.
In addition, the survival rate of domestic small and micro enterprises within three years is basically only 10%.
With such a low survival rate, there is no way to adjust it using risk pricing.
If we can determine which small and micro enterprises can survive, what kind of loans can we make and go directly to angel investment?"
Zhang Yida smiled and said: “The purpose of the state’s regulations is to allow P2P companies that specialize in enterprise loans to develop loans to small and micro enterprises.
Only when small and micro enterprises develop can the national economy be active."
“But there are ways to avoid it. As far as I know, many colleagues have already begun to deal with it.
If the loan limit of a personal platform does not exceed 200,000, I can bring in my wife and the elderly at home, and there are ways to increase the limit.
For businesses, it doesn’t cost much to register a company.”
Zhang Yida shook his head, "These are all crooked ways. I still want Ruimin Financial Management to work on small and micro finance."
Fang Yuhan spread her hands, "But apart from being able to raise funds, we don't have any outstanding skills in the field of corporate loans."
"How's Xinglong Loan doing?"
Fang Yuhan was silent for a while and then said: "Not yet, the data is not perfect at all.
Xinglong Dai is an enterprise loan product. Currently, except for cooperating with upstream and downstream suppliers of several large manufacturing groups, it is difficult for us to break away from the supply chain system and carry out retail business.
The small and micro tax bank platform we launched currently does not have enough companies and cooperative banks.
There is no way to collect too much corporate data, and the risk control model is just an empty frame.
It’s just superficial, and its practical ability is not strong at all.”
"No matter what, this small micro tax bank platform must be built."
Fang Yuhan said: "In fact, there is no need to do this kind of wheel-making work. There is a company in Pengcheng that does a very good job in tax, bank and credit big data.
I think we can acquire them to supplement our business."
"Have you ever been in contact with them?"
Fang Yuhan nodded, "We have communicated. I think Mr. Zhang can make an appointment to meet with their team."