Since regulators opened up the consumer finance market three years ago, lenders have deployed hundreds of thousands of salespeople to cash registers and even car parks across China to hand out on-the-spot loans for phones, electronic gadgets and cars. The Financial Times reports the pent up demand was huge. Millennial consumers often struggle to obtain loans from traditional lenders and many in smaller cities do not carry plastic in their wallets. This burgeoning market is expected to be worth Rmb3.4tn ($500bn) by 2019, with the rise in consumption expected to help China wean itself off investment-led growth. China’s household debt has doubled over the past eight years and is widely expected to reach 50% of gross domestic product by the end of the year. This proliferation of high-interest lending to young consumers, coupled with rapidly climbing household indebtedness, could spell trouble for financial regulators in the future, some experts warn.
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