China’s beleaguered peer-to-peer lending market will get a boost from Greater Bay Area development, says DBS Bank
- By 2030, P2P lending will be the fifth-fastest growing industry in the new economic hub, the Singaporean bank estimates
- The once-booming industry, which gives smaller firms easy access to funds, shrank drastically when regulators swooped to halt an epidemic of fraud
China’s peer-to-peer (P2P) lending industry, which has shrunk dramatically under a government crackdown, should get a welcome boost from the development of the Greater Bay Area, according to DBS Bank.
By 2030, P2P lending will enjoy an annual growth rate of 17 per cent in the new economic and innovation hub, making it the fourth-fastest growing sector there, the Singaporean bank estimated.
In P2P lending, internet-based platforms match private investors with individuals or small companies that want to borrow.
“We see that P2P lending across China could reach one trillion yuan by 2030, and the Greater Bay Area with its particular focus on innovation and entrepreneurship, would be more open to the P2P concept,” said Ken Shih, senior research director at DBS.
“A capital-intense industry upgrade is inevitable, and P2P platforms can meet the financing needs of new business formats – small and micro companies in particular.”
The bay area, encompassing Hong Kong, Macau, Shenzhen and eight other mainland Chinese cities in Guangdong, aims to be a leading global innovation hub embodying President Xi Jinping’s ambition to create a technology powerhouse to rival Silicon Valley or the Tokyo Bay Area.
