This article is from the official accountOriginal, the author is Sun Yang, a senior researcher at Suning Institute of Financial Research
Once upon a time, online small loan companies relied on the advantages of scenarios, traffic, data and national exhibition industry to achieve the peak of Internet loans through loan assistance and joint loans. In order to regulate the development of Internet loans, the industry has been calling for the formulation of national online micro-loan supervision measures.
On November 2, 2020, the China Banking and Insurance Regulatory Commission and the People’s Bank of China jointly issued the “Interim Measures for the Administration of Online Small Loans (Draft for Comment)” (hereinafter referred to as the “Measures”), which stopped online small loans The cross-regional business, requirements and registration locations of the flow platform are unified, the proportion of joint loan capital is clarified, the upper limit of the single-family loan balance of 1 million is clarified, the number of holding online small loan companies is limited, and the capital requirements are increased. Please see the detailed explanation below.
cross-region business will be suspended
Article 2 [Basic Definition] A microfinance company’s online microfinance business shall be mainly carried out in the provincial administrative region of the place of registration; without the approval of the banking regulatory agency of the State Council, a microfinance company shall not cross provinces -Level administrative regions carry out online microfinance business.
Article 37 [Rectification of Stock Cross-District Business] For micro-credit companies that have cross-provincial administrative regions without the approval of the State Council’s banking regulatory agency to engage in online micro-credit business, they shall beThe intelligent collection system has realized 100% online “Wechat Loan”.
and the Internet platform registration area should be the same
Article 9 [Internet Platform] (3) The registration place of the Internet platform operator and the registration place of the microfinance company are in the same province, autonomous region, or municipality directly under the Central Government.
Interpretation:
Internet platforms are companies that bring online traffic to online small loan companies. Now many online small loan companies and the Internet platforms they use are not in the same area. For example, the main body of the third-party company that brings traffic to a small online loan company is registered in Shanghai, while the main body of the small online loan company is registered in Chongqing. According to the “Measures”, this kind of remote situation is not allowed in the future.
This idea is obvious. It is to bring online small loan companies and their flow parties into unified localized management to prevent the separation of supervision of flow parties and loan business. This has a very large impact. Some online small loan companies will accelerate their relocation to the location of traffic companies, such as from Chongqing to Beijing, and from Chongqing to Shanghai. This will promote the reorganization of financial resources across the country.
The joint loan contribution shall not be less than 30%
Article 15 (3) In a single joint loan, the capital contribution ratio of a small loan company operating online small loan business shall not be less than 30%.
Interpretation:
This article hits the key to online small loan companies the most. Although many online small loan companies also have capital, their lending mainly relies on funds from banking institutions. In some scenarios of joint loans, some well-known top online small loan companies only contribute a nominal 1% of a single joint loan, basically relying on flow to make money from financial institutions. The 30% minimum investment ratio is too low for online small loan companies, and it basically announces the end of the Internet loan era for online small loan companies.
It is very likely that online small loan companies will no longer do joint loans, but will specialize in loan assistance and financial technology services. Banking institutions will be on the stage of history and will become the protagonist of the Internet loan era in the future.
Supply chain finance business has been hit
Article 13 [Loan Amount] For natural personsIn principle, the balance of a single-family online micro-loan shall not exceed RMB 300,000, and shall not exceed one-third of its average annual income in the last 3 years. The lower of the two amounts is the maximum loan amount; for legal persons or others In principle, the balance of single-account online micro-loans of the organization and its related parties shall not exceed RMB 1 million.
Interpretation:
The restrictions on personal loans are basically the same as the new regulations for commercial banks’ Internet loans. However, the 1 million limit for legal persons has little impact on small and micro financial business, and has a great impact on supply chain finance business, because the single account amount of supply chain finance is generally relatively large, exceeding 1 million yuan, which will Suppress the space for small loan companies to do supply chain finance. Especially for large online small loan companies, it has a greater impact.
This provision will further consolidate online small loan companies into the small and micro market. In the future, online small loan companies will focus more on personal finance and small and micro financial businesses. Internet small loan companies can only make loans of less than 1 million yuan for distributors and dealers at the end of supply chain finance, and supply chain finance loans of more than 1 million yuan will be loaned through banks and other licenses.
Capital must be sufficient
Article 10 [Registered Capital] The registered capital of a small loan company operating online small loan business shall not be less than RMB 1 billion, and it shall be a one-time paid-in monetary capital. The registered capital of microfinance companies that operate online microfinance business across provincial administrative regions is not less than RMB 5 billion, and is a one-time paid-in monetary capital.
Interpretation:
Capital adequacy ratio refers to the ratio of a bank’s own capital to its risk-weighted assets, and represents the bank’s final solvency for liabilities. Banks use a small amount of capital to operate a large number of debt assets in order to obtain a high rate of return. This is the “leverage principle”, but it is also one of the root causes of the bank’s systemic risk. In order to allow the financial industry to have sufficient resistance in the face of many risks and to minimize the financial crisis, an 8% capital adequacy ratio requirement was determined at the “Basel Banking Supervision Committee” meeting held in Basel, Sweden in 1988. my country also established the capital adequacy ratio as an important risk control index in the financial system reform that began in the mid to late 1990s.
Take a small loan company in Chongqing as an example. The company has a nationwide online microfinance business license. The current registered capital is RMB 2 billion. According to the Measures, the company needs to increase its capital to 50 100 million, and must be paid. The capital requirement will make some Internet small loan companies with weak capital strength to withdraw from the stage of history.
only one company can be held
Article 20 [Equity Management] The same investor, its affiliates, and persons acting in concert shall not exceed two microfinance companies in which the same investor, its affiliates, and persons acting in concert as the main shareholders participate in the microfinance business across provincial administrative regions, or The number of small loan companies that hold a controlling stake in cross-provincial administrative regions to operate network small loan business shall not exceed one. It is forbidden to entrust others or accept the entrustment of others to hold equity in small loan companies operating online small loan business.
Interpretation:
Now some giants hold two or more small online loan companies that can develop their businesses nationwide to break through the limitation of asset size. This will also become history in the future. The giant needs to close the second online small loan company in its hands, or dilute the shares to participate in equity. This will significantly reduce the volume of the giant’s Internet loan business, so the giant urgently needs licenses from banks and consumer finance companies to undertake online small loans The company’s business volume has dropped. This is why some Internet giants have recently applied for registration of consumer finance companies.
Where are the online small loan companies going?
With the issuance of the “Interim Measures for the Administration of Internet Loans by Commercial Banks” in July 2020, people in the industry have already anticipated that new rules for online small loan companies will be introduced sooner or later, because online small loan companies and commercial banks are At both ends of the Internet loan, the former controls the flow of the scene and the latter controls the funds.
The advantages of Internet traffic and data can allow Internet giants to quickly build advantages in the loan business, but they also bring some risks. If hundreds of banks gather in the scenario of a small online loan company, the bank’s online loan business is highly dependent on one or two online small loan companies. There will be no problem when the economy is good, but once the economy fluctuates, these few If a small online loan company breaks out risks, hundreds of banks will be affected.
Regulatory considerations and vision are long-term. They must go beyond the economic interests of a certain industry to see the worst in the future and plan ahead. We can clearly see that all the new content in the “Measures” is to consolidate the ability of online small loan companies to prevent risks, by raising the threshold to clear the weaker online small loan companies. Supervision does not object to online business, and encourages online small loan companies to do online business in the provincial administrative region of the place of registration, and also encourages powerful online small loan companies to apply to the State Council’s Banking Regulatory Agency for national exhibition qualifications, but approve national exhibitions must>