Chinese p2p lenders are not failing, they are being killed. I haven’t seen any data to show these lenders had unsustainable default rates or lack of lending capital that a typical non-regulator driven failure would have. Non-banking lenders and shadow lenders are primary lenders for majority of people. IMO, crackdown is politically driven, the banking lenders being politically connected and influential, regulators are doing their bidding. Majority of non-banking lenders being killed were smaller entities with regional coverage. When there are few thousand lenders, you are bound to have some failures. I don’t believe non-regulator driven failure rate in China is that much different than US and European failures.
Particularly in US, smaller lenders never got the foothold because regulations were already stacked against them. There is no way even larger players like Lending Club and Prosper could compete against GS backed Marcus and other banking lenders. Established financial institutions have large enough regulatory moat to protect their business.
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