Most Important Peer to Peer Lending Companies in China - Lend Academy

Over the past nine months we have worked independently and in conjunction with our friends at Wangdaizhijia, a Chinese P2P lending media firm, to research the huge Chinese P2P lending market.  As we mentioned in early December, the market is enormous, arguably larger than the US market, and it is growing rapidly.  There are literally hundreds (or possibly thousands) of Chinese P2P lending platforms, which made it difficult to figure out where to start.  So with every interview, we asked the simple question, who are the most important P2P lending companies in China?  Not the largest or the oldest or the most popular but rather, who are the most important?  We have received a variety of answers but after asking the question over and over, a clear group of firms have emerged. The following is our list of the most important Chinese P2P lending companies ranked in alphabetical order:

China Rapid Finance (formerly China Risk Finance)

China Rapid Finance is a 12 year old company that provides consumer credit management solutions to financial institutions to help manage credit card risk and to develop credit card decision solutions.  They are experts in risk underwriting, and more than 50% of all credit cards that have been issued in China have used CRF’s credit risk underwriting models.  In 2011, CRF launched a P2P platform and, at the end of 2013, the platform had an outstanding balance of approximately 1.5b yuan ($250m) with average loan size of $6,000.  According to the Wall Street Journal, China Rapid Finance is in the preliminary stages of exploring a U.S. IPO.

CreditEase

CreditEase is the largest P2P lending platform in the world.  They are also a wealth management firm that provides a suite of services to its investors including asset allocation guidance, insurance policies, and mutual fund investment advice in addition to access to their P2P lending platform.  According to the company, CreditEase has originated over 60b yuan ($9.6b) in secured and unsecured P2P loans to date up from about 27b yuan ($4.3b) last year for a 122% growth rate.  CreditEase relies on a huge sales force for offline borrower acquisition, which accounts for 99% of their originations, and they have a large secured lending business, which is mostly comprised of car loans.  Their online lending originations represents a small fraction of their overall business.

Their average unsecured loan size is $8,000, the average duration is about 24 months, average interest rate of between 8-26%, and their average default rate is 2-3%.  In 2011 the partnered with Fair Isaac (FICO) China to develop risk based scorecard for their underwriting decision making.  Kleiner Perkins, Morgan Sta

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