Lexin and Qifu Technology fell nearly 70% in a year, and peer-to-peer lending platforms are once again under strict restrictions.

(Source: Damo Finance)

Produced by | Damo Finance

The loan industry is once again welcoming significant regulatory policies.

On March 15, the State Administration of Financial Supervision released information indicating that, to maintain order in the personal loan market, protect the legitimate rights and interests of financial consumers, and improve the quality and efficiency of financial services, the National Financial Supervision and Administration, together with the People’s Bank of China, formulated the “Regulations on Clear Disclosure of the Total Cost of Personal Loan Business.”

These regulations require that when disclosing the total cost of personal loans, lenders must itemize all interest and fees borne by borrowers under normal performance scenarios, convert each item into an annualized rate using the internal rate of return method, and then sum them to calculate the borrower’s annualized comprehensive financing cost. The scope includes banks, trust companies, microloan companies, consumer finance companies, and partner institutions within the loan industry.

Just two days before the new regulations were issued, on March 13, the website of the Financial Supervision and Administration announced that, recently, in response to issues with internet lending platforms, the bureau had held talks with the operating agencies of five platforms: Fenqile, Qifu Borrow, Niwo Dai, Yixianghua, and Credit Fei.

These meetings targeted five major pain points in the industry: standardizing marketing and advertising, clearly disclosing interest and fees, strictly protecting personal information, conducting lawful and compliant collection, and improving complaint resolution mechanisms. These five requirements directly address the areas most frequently complained about by borrowers.

Lending platforms have long been a sensitive area within personal loan services. In Sina Finance’s 2026 “315 Financial Complaint Black and Red List,” issues such as “forced disbursement turning into套路贷 (loan shark tactics), disappearance of repayment portals, and ‘exploding’ contact lists” were listed among the top five financial consumer complaints.

The introduction of new regulations and the regulatory bureau’s meetings directly target the opaque interest and fee practices and hidden charges that have long plagued lending platforms. Previously, practices such as “bundled sales” that covertly charged upfront interest or hidden real loan rates through guarantee fees and membership fees—collectively known as “套路贷”—have been rendered unviable under the “full coverage of interest and fee items” requirement.

For long-term, traffic- and capital-driven lending platforms, the inclusion of partner institution fees into borrower management responsibilities in the new regulations, along with the emphasis on consumer rights protection during the meetings, marks the end of the era of reckless profit-making through information asymmetry and excessive interest spreads.

End of reckless growth

The timing of the meetings, just before the “3.15” International Consumer Rights Day, is no coincidence, signaling a clear regulatory stance to rectify chaos in the internet lending industry.

All five platforms summoned are leading representatives in the industry. Fenqile, Qifu Borrow, Niwo Dai, and Yixianghua are associated with publicly listed companies Lexin (LX), Qifu Technology (QFIN, 3660.HK), Jiayin Technology (JFIN), and Yiren Zhike (YRD), respectively. Only Credit Fei’s parent company, Xinfei Technology, is not yet listed. Their development histories span over a decade of industry evolution.

Fenqile is a core brand under Lexin Group, founded in Shenzhen in 2013, pioneering China’s installment shopping e-commerce model. As an early leader in large-scale expansion, Fenqile listed on NASDAQ at the end of 2017, holding a nationwide small loan license, with 240 million registered users, a single-quarter transaction volume of 50.89 billion yuan in Q3 2025, and an outstanding loan balance exceeding 101.84 billion yuan.

However, the capital market has expressed deep concerns over its compliance risks and the sustainability of its traditional profit model. Lexin reached a high of $11.331 per share last March, but following the issuance of new lending regulations, its stock has plummeted, currently trading at $2.645 per share, with a market value down 77% in a year.

According to its Q3 2025 financial report, Lexin’s revenue was 3.42 billion yuan, but its revenue structure is heavily reliant on interest spreads from lending and matching services, with guarantee and matching income accounting for 76.5%. More worryingly, the Black Cat Complaint platform shows Fenqile has accumulated nearly 149,900 complaints, with nearly 100 new complaints daily, mainly about high interest rates, bundled sales, and aggressive collection.

Qifu Borrow, formerly “360 Borrow,” rebranded in August 2024, is a credit technology brand under Qifu Technology (formerly 360 Digital Science). According to its 2024 financial report, by the end of 2024, founder Zhou Hongyi indirectly held 15.87% of Qifu Technology through Aerovane Company Limited, making him the largest shareholder.

Qifu Technology has achieved dual listing on NASDAQ and HKEX, holding both small loan and financing guarantee licenses, with over 280 million registered users and deep cooperation with 159 licensed financial institutions. In the first three quarters of 2025, it reported a total net income of 15.11 billion yuan and a net profit attributable to shareholders of 4.97 billion yuan.

Its stock price has followed a nearly identical downward trend as Lexin’s, falling over 70% since last March. As of March 16, its stock price was HKD 55.25 per share, with a market value of HKD 15.621 billion.

On the Black Cat Complaint platform, searches for “Qifu Borrow” or “360 Borrow” show numerous complaints about violent collection and high interest charges, with some users reporting an effective interest rate as high as 40%, far exceeding national limits. In early 2026, Qifu Technology disposed of a non-performing asset package worth 7.4 billion yuan at a discount, raising concerns about asset quality in the lending industry.

Most of these five platforms experienced rapid expansion during the industry boom from 2015 to 2017, with an average annual growth rate exceeding 20%. However, this scale expansion also brought issues such as rising consumer leverage and increased borrower joint debt risks.

At the end of last year, the “Guidelines for Managing the Total Cost of Small Loan Companies” were officially issued, with the core requirement that all small loan companies must not issue new loans with an annualized comprehensive cost exceeding 24%.

With the implementation of the new regulations, mainstream domestic institutions have begun to lower interest rates. For example, Lexin’s parent company stated in its financial report, “In Q3, we efficiently completed business adjustments and transitioned our operations to comply with new regulatory requirements. From October 1, 2025, all new loans initiated will be priced at or below an annual interest rate of 24%.” The Fenqile app also prominently displays “Annual interest rate (simple interest) 8%-24%.”

However, covert high-interest practices have not been entirely eradicated. Outside mainstream institutions, some non-mainstream entities continue to use methods like upfront interest (“砍头息”) and “monthly financing guarantees” to covertly charge high rates under the guise of compliance.

This meeting is not only a key step in implementing the “new lending regulations” but also a clear signal of a shift in regulatory direction—moving from focusing solely on banks to regulating both banks and lending platforms together, overseeing the entire chain. For the entire lending industry, this regulatory sword signifies a decisive move; the era of reckless growth driven by information asymmetry and excessive profits has come to an end.