First-half earnings of China’s major players in the consumer-financing market have given some backing to Beijing’s policy of tighter regulation in the cash-loan market, with several companies posting slower profits and revenue growth.
Three consumer-financing companies – Home Credit Group, Suning Consumer Finance Co. and Shanghai Shang Cheng Consumer Finance Corp. – posted losses for the first six months of the year, reports Caixin. The market’s biggest profit maker of 2017, Bank of China Consumer Finance Co., has yet to publish data.
China’s cash loan market has become a key target for regulatory clampdowns on financial risk. Earlier this year, the country’s central bank issued a new law banning licensed consumer-financing firms from working with unlicensed platforms.
A slowdown in household income growth is also taking the steam out of profit growth, according to Suning Director Xue Hongyan. The downward trend in the industry’s growth is likely to continue, said Xue, as growth in per capita disposable income stops being able to support consumer loans.