Dianrong and China United SME Guarantee Corporation, known as Sino Guarantee announced the launch of a new lenders protection plan for Dianrong customers. According to the duo, this new protection plan went into effect at the beginning of 2018 and is designed to provide third-party protection in the event of a loan default.
“Dianrong’s borrowers now have the option to purchase the Sino Guarantee lenders protection plan, which further improves the borrower’s risk and credit profile. Sino Guarantee will then use a dedicated fund account to pay lenders the loan principal and any outstanding interest in the event of a loan default covered by the plan. Additionally, once the lenders are paid following a default, Sino Guarantee will then initiate and manage borrower repayments directly. After deducting repayment costs, the remaining funds will be deposited to a dedicated account held by Bank of Shanghai and administered by Sino Guarantee.”
It was also reported that the Sino Guarantee lenders protection plan fully complies with China’s new P2P guarantee regulatory requirements. Also, all funds within the plan are monitored by the custodian bank. Bryan Pang, Chief Risk Officer at Dianrong, stated:
“Risk management is part of Dianrong’s DNA and is central to our business planning and execution. Sino Guarantee has excellent capital strength and compliance systems, and this collaboration provides lenders and borrowers with an independent protection mechanism and further strengthens Dianrong’s position as a leading online lending marketplace.”
The duo then added:
“Beyond this new third-party guarantee, Dianrong’s advanced technology and risk-management capabilities continue to minimize non-performing loans (NPLs) on its online marketplace lending platform. As of year-end 2017, Dianrong’s NPL ratio was 2.9% for outstanding balances 90 days or more past due.”