SHANGHAI, Oct 21 (Reuters) - China is considering tightening controls over the “pay-day” loan industry amid concerns that unscrupulous operators may charge millions of borrowers excessive interest rates, the official Securities Daily reported.
The successful initial public offering (IPO) of Chinese online micro-credit provider Qudian Inc, which raised about $900 million in New York, has encouraged many such platforms to plan their own IPOs on Wall Street, the newspaper reported.
The firm, backed by Alibaba Group affiliate Ant Financial, runs a mobile platform that allows college students and young workers to borrow amounts as low as $60 to buy clothes, concert tickets or smartphones.
But the paper said many operators have taken advantage of regulatory loopholes to charge excessively high interest rates. Citing industry insiders, it said new industry rules could emerge within six months.
Household debt has emerged as one of China’s biggest challenges, and was estimated to have reached around 50 percent of its gross domestic product last year, more than doubling in less than a decade.
Reporting by Luoyan Liu and David Stanway; Editing by Kim Coghill