The National Internet Finance Association of China Requires Members to Disclose Annualized Lending Costs
This week, the National Internet Finance Association of China (NIFA) issued a notice to member institutions about annualized lending costs disclosure and industry discipline.
According to the notice, some online lending institutions only offer a vague daily/monthly interest rate or commission fees explanation in advertisements, which may be inconsistent to the actual costs and trap the consumers into making an irrational investment. Hence, NIFA requires all members to offer clear product information, including annualized lending costs and risk alert in product presentation, advertisements, contracts, and marketing.
From October 2019, NIFA will carry out inspections regarding the disclosure.
Member institutions that fail to comply with the requirements will receive punishment. Related disclosure rules will be drafted by NIFA with guidance and support from experts from PBC, CBIRC, Tsinghua University and Renmin University. (Source: NIFA)
The China Banking and Insurance Regulatory Commission to Conduct Hierarchical Administration of Online Microfinance Platforms
On September 11th, the financial inclusion department of the CBIRC [China Banking and Insurance Regulatory Commission] announced that it will conduct differentiated administration on online microfinance platforms, which will raise the barrier of entry and offer more consumer protection.
At present, the CBIRC is still working on related regulations. (Source: ChinaNews)
WeChat Pay to Launch Credit Product Fenfu
Tencent is reported to be developing a WeChat Pay credit product named Fenfu (分付). It is a consumer installment loan like the Weilidai (微粒贷) offered by Tencent-backed WeBank and Huabei (花呗) from Alipay.
According to Tencent, Fenfu may launch in the fourth quarter of the year and be operated by the WeChat Pay Department.
In the first quarter of 2019, the scale of China’s third-party mobile payment transactions, as illustrated in an iResearch report, reached 55.4 trillion yuan with an increase of 24.7%, of which Alipay accounted for 53.8%, and Tenpay (including WeChat payment) accounted for 39.9%. By January of this year, the worldwide Alipay users has exceeded 1 billion, including 300 million overseas users and 700 million domestic ones. As of November last year, Alipay has more than 650 million active users per month. Meanwhile, the number of users of WeChat Pay binding bank cards at the end of 2018 has exceeded 800 million. It is these 800 million potential Fenfu users that may change the market share of China’s consumer installment loan market. (Source: Xinliu Finance)
Trust Mutual Life and Sina Jointly Launch Online Health Insurance Product “Weibo Baby Plan”
This week, China’s first mutual life insurance organization Trust Mutual Life launched a child’s health insurance product with social media giant Sina Weibo.
The product, Weibo Baby Plan, allows Weibo users to redeem 999 Weibo Points for a one-month critical illness insurance coverage of 50,000 yuan for their children aged from 30 days to 17 years old. The 15 illnesses include leukemia, paralysis caused by polio, brain damage, etc. The Plan offers a 10-day-waiting period, shorter than the normal 30 days. In addition, policyholders could apply a review to the “Jury Mechanism” if he/she is not agreed with the claim settlement. (Source: 36Kr)
The above is a weekly synopsis of the biggest stories on Fintech in China provided by WeiyangX, part of Tsinghua University, in partnership with Crowdfund Insider.
WeiyangX is the most influential website focusing on Fintech in China. The site covers the latest news, industry data analysis, business practices, and in-depth Fintech cases in Fintech. WeiyangX is incubated by Fintech Lab. Founded by Tsinghua University’s People’s Bank of China (PBC) School of Finance in 2012, the Fintech Lab is the first and leading research entity dedicated to leading best practices, promoting interdisciplinary innovation, and encouraging entrepreneurship in the field of fintech through scientific research and innovative project incubation.