Online lending default risk caused by...>

CHINA PRESS: Online lending default risk caused by delinquencies is a "grey

rhino" for China -- a risk that is likely to happen and have a significant

negative impact but has been largely ignored -- the South China Morning Post

reported Wednesday. High interest rate and penalties for not paying back loans

have made thousands of young people run away from home and made their families

suffer, the newspaper said. As finance technology growth booms in China because

large amounts of cheap capital accumulated by China's impressive economic growth

is available and most adults have a cellphone, low-income young people who had

been shunned by traditionally lenders are resorting to using financial firms

providing payday loans even without knowledge of the exact annualized interest

rate and penalty rules, the newspaper said. The Peoples' Bank of China has

recently issued policies to prohibit payday loan companies providing loans with

an interest rate more than a 36% annualized rate, the limit set by the

government. The central bank also ordered a pause in creation of new payday loan

companies and will exam existing companies. (South China Morning Post)