Chinese P2P Lender Hexindai Announces Investor Insurance Coverage Agreement with Shanxi Zhengxuan Finance Guarantee

Chinese peer-to-peer lending platform Hexindai (NASDAQ: HX) announced on Friday it signed a cooperation agreement with Shanxi Zhengxuan Finance Guarantee Co., Ltd., which reportedly is controlled by the State-owned Assets Supervision and Administration Commission of the State Council (SASAC), to provide investors on its platform with insurance coverage that protects them against the potential default risk of non-paying borrowers. 

According to Hexindai, all new loans facilitated on Hexindai’s marketplace have required borrowers to obtain insurance through Shanxi Zhengxuan. Borrowers pay 4.5% and 0.5% of the principal amount to Shanxi Zhengxuan as insurance policy premium and service fee, respectively. If a default were to occur, Shanxi Zhengxuan will compensate the investor with an amount up to the loan residual principal and three months of accrued interest, in accordance with the terms and conditions of the cooperation agreement and the agreements between the borrowers and Shanxi Zhengxuan.

Speaking about the agreement, Xinming Zhou, CEO of Hexindai, stated:

“Our management team is constantly seeking ways to improve user experience, expand confidence in our platform among both borrowers and investors, and create redundancies to protect against unforeseen events. We started discussions with Shanxi Zhengxuan because we recognized that there were growing risks in the market. We wanted to both diversify insurance providers on our platform and add a second option so that our users would have greater choice.”

Zhou went on to add:

“When we learned that Changan Insurance was facing challenges, we were pleased that Shanxi Zhengxuan was able to provide coverage for all new loans facilitated on our platform and that our constant focus on risk mitigation was paying off. We believe that the coverage that investors receive from Shanxi Zhengxuan will help strengthen confidence in our platform, especially in the current turbulent market environment.”

Sponsored Links by DQ Promote

Send this to a friend