China bans online creditors from targeting students

China bans online creditors from targeting students

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Beijing has banned online lenders from extending credit to university students following public outrage over young people falling victim to loan sharks charging exorbitant rates. Only a limited number of authorized banks are permitted to make loans to students, according to a joint directive by the China Banking Regulatory Commission, the Ministry of Education and the Ministry of Human Resources and Social Security. Online lenders with existing loans must specify a schedule to withdraw from the business, it said. The directive, published on the website of the Finance Office of Jiangxi province, is the latest attempt by the government to address a grey area of the consumer lending market that has seen some students paying sky-high interest rates for taking out small loans for minor purchases such as smartphones, according to the South China Morning Post.  In 2009 regulators shut down credit card business targeting students amid concerns over a lack of protection.