Ning Tang, founder and CEO of CreditEase – a huge Chinese Fintech that started as just a peer to peer lending platform, recently spoke to Bloomberg in Asia. CreditEase is also the majority shareholder of US listed online lender Yirendai (NYSE:YRD)
Tang provided an interesting update on the Chinese P2P sector as it has been going through a transformational process. In July alone, it has been reported that over 100 peer to peer lenders shut down in China as regulatory authorities tighten operational standards to curb rampant fraud. The actions are to ensure a robust and sustainable sector of online lending.
CreditEase was one of the first online lenders to launch in China and thus has a unique perspective. CreditEase has since morphed into an online wealth management platform and more, with well with over $30 billion in assets under management.
Tang views the regulatory crackdown as a positive and necessary step. Asked how people can trust the online lending sector in China, Tang states;
“We are going through a clean up process, a regulatory registration process. After this the marketplace will become more clean … this is very good for market leaders like us and also for the investor community who will become more knowledgable. So I am hopeful that in the coming 12 to 18 months we will have a much better Fintech marketplace.”
Tang shared that revenues have not been impacted much by the regulatory actions as CreditEase has become more diversified with inclusive finance, alternative asset management, and wealth management.
“The marketplace lending sector will be very beneficial to the small business sector in the coming decade.”
Speaking about wealth management, Tang said they see tremendous opportunity in China as Chinese entrepreneurs have created tremendous wealth in the past several decades. Tang added that investors are focusing more on long term equity investments instead of short term speculation – from China only to global asset allocation. Investors are looking at the “new economy” and venture capital and private equity. Tang mentioned the 200 to 300 million middle class Chinese as an opportunity for his company.
Tang stated they are still on track to list CreditEase by 2020. Asked where CreditEase would list and Tang would not be cornered stating he would leave that to his advisors.
You can watch the Bloomberg video below.