Jack Ma’s Alipay caps online loan rates at 24%, lenders fall

Bloomberg

Alipay, China’s leading internet payments platform, will enforce a cap of 24 percent on interest rates charged by lenders on
its site as Chinese authorities are said to be preparing to
crack down on so-called online microlenders.
The platform, part of the Ant Financial business controlled by billionaire Jack Ma, said in an emailed statement that it recently discovered some lenders charging rates that exceed the legal limit and using “inappropriate methods to collect debt”.
“To better protect the interests of consumers, we decided to impose the rule on limiting interest rates to 24% for products being marketed on Lifestyle,” the company said in the statement.
“And we requested all accounts to self-inspect and rectify before November 30, 2017. We will continue regular checks on the platform and delist any non-compliant accounts.”
The move followed reports in Chinese media that authorities plan to purge the country’s 157 online microlenders and leave only large state-owned companies and the biggest internet firms. Analysts at Bernstein cut their earnings-per-share and target-price estimates for
Beijing-based Qudian Inc, which currently charges 36 percent on loans. The company’s New York-listed American Depositary Receipts dropped 24 percent and led declines in the sector.
Separately, Bloomberg News reported earlier that regulators and police in China are investigating whether data from
more than a million students who are Qudian clients were leaked and possibly sold online, according to people with knowledge of the matter. Qudian said in an email that it wasn’t aware of the matter and two calls to the Ministry of Public Security were unanswered.
Ant Financial, formally known as Zhejiang Ant Small & Micro Financial Services Group,
operates Yu’E Bao—the world’s largest money-market fund—as well as Alipay.