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Rapid rise of peer-to-peer finance in China hold lessons for the world, says ACCA report


10 Dec 2015


Trade & Society

The spectacular rise of peer- to-peer lending in China – making it the largest alternative funding market in the world – can provide lessons for small business communities and organisations around the world, according to a new study from ACCA (the Association of Chartered Certified Accountants).

The report entitled The rise of peer-to-peer lending in China: An overview and survey case study estimates that by the end of 2015, the volume of peer-to-peer lending could be as high as US$ 40 billion each year, with small and medium sized business owners accounting for up the 40% of borrowers in China.

“The rapid growth of China’s peer-to-peer lending and wider internet finance sector has gained a lot of attention in China, but many people remain unsure of the benefits and risks of these new financing models,” said report author Dr Luke Deer, who added: “We hope this study contributes to understanding of peer-to-peer lending in China, including its role in increasing access to much needed finance for SMEs and consumers.”

ACCA commissioned the research, which was undertaken and written by Dr Deer, a post-doctoral research associate with the Department of Political Economy at the University of Sydney and a research associate with the University of Cambridge Centre for Alternative Finance and the Cambridge Judge Business School, Jackson Mi, an assistant professor at the Shanghai Maritime University, and Yu Yuxin, a lecturer in the School of Economics and Finance at Shanghai International Studies University.

Working with ACCA, they carried out a detailed survey of nearly 1,000 borrowers and lenders from China’s first online direct peer-to-peer lending company Paipaidai, which started offering unsecured online micro loans in 2007.

That showed that 87% of those borrowing through Paipaidai selected the low borrowing threshold and easy borrower audit process as their main reason for borrowing from providers such as Paipaidai, while 56% said they had no previous borrowing history from traditional financial institutions.

Surprisingly, 51% of borrowers said that their main reason for borrowing funds from an online peer-to peer provider was that it would enable them to build credit worthiness by successfully meeting high interest repayments of up to 18% to help them secure better financing terms in the future.

While much previous discussion centred on potential risks posed by peer-to-peer lending in China, this report concludes that the transparency created by online platforms mitigates against the risk of fraud and credit default.

More than 90% of borrowers said they borrowed money for a year or less, with 40% saying they borrowed for between three to six months, with 72% of individual borrowers saying that the low borrowing threshold - the amount of money they need to have to repay the loan – along with an easy application audit, were their main reasons for choosing internet finance loans.

Lenders were attracted to investment channels such as Paipaidai to realise capital gains, get returns that were up to five times higher than the bank interest rate and to increase the number of available investment channels.  For 11% of lenders, supporting wider social development and SME financing was a reason for investing through a peer-to-peer channel.

The report says that after allowing rapid growth of internet finance, China’s government introduced guidance regulations in July 2015 which are already leading to a consolidation of peer-to-peer lending providers and putting those that meet the requirements on a much firmer footing in future.

Rosana Mirkovic, Head of SME Policy at ACCA said: “Peer- to-peer lending has enabled many thousands of small Chinese businesses and individuals, who would normally find it impossible to access finance, to fund their business activities, and generate more economic activity. With this becoming an ever more important sector, there is a need for policymaker, regulators and bodies such as ACCA, to ensure there is further reliable data on the development and outcomes of this form of finance and help to identify ‘best practice’ for regulating  new alternative financial services for individuals and SMEs around the world in future .”    


The full report is available here:


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For media enquiries, contact:


Colin Davis, ACCA Newsroom

tel:  +44 (0)20 7059 5738

mob: + 44 (0)7720 347 713


Notes to Editors


About ACCA

ACCA (the Association of Chartered Certified Accountants) is the global body for professional accountants. It offers business-relevant, first-choice qualifications to people of application, ability and ambition around the world who seek a rewarding career in accountancy, finance and management.

ACCA supports its 178,000 members and 455,000 students in 181 countries, helping them to develop successful careers in accounting and business, with the skills required by employers. ACCA works through a network of 95offices and centres and more than 7,110 Approved Employers worldwide, who provide high standards of employee learning and development. Through its public interest remit, ACCA promotes appropriate regulation of accounting and conducts relevant research to ensure accountancy continues to grow in reputation and influence.

Founded in 1904, ACCA has consistently held unique core values: opportunity, diversity, innovation, integrity and accountability. It believes that accountants bring value to economies in all stages of development and seek to develop capacity in the profession and encourage the adoption of global standards. ACCA’s core values are aligned to the needs of employers in all sectors and it ensures that through its range of qualifications, it prepares accountants for business. ACCA seeks to open up the profession to people of all backgrounds and remove artificial barriers, innovating its qualifications and delivery to meet the diverse needs of trainee professionals and their employers. More information is here: