Peer-to-Peer Lending at a Crossroads: New and Veteran Players Urgently Seek Overseas Lending

Questioning AI · Going Overseas to Make a Fortune: What Hidden Risks Are in Emerging Markets?

Emerging markets remain hot spots for online lending, but this opportunity is no longer as easy as before.

Author | Qiao Shanshan

Editor | Anxin

The lending industry has felt a deep chill this spring.

Recently, the State Financial Supervision and Administration Office held talks with the operating agencies of five platforms—Fenqile, Qifu Borrow, Niwodai, Yixianghua, and CreditFei—regarding issues in internet lending.

The talks required platform operators to strictly regulate marketing and promotional activities when collaborating with financial institutions, clearly disclose loan fee and interest information, strictly follow personal data protection laws, conduct collection activities legally and compliantly, establish effective customer complaint mechanisms, and protect the legitimate rights and interests of financial consumers.

This is not an isolated event but a reaffirmation and effectiveness test following the implementation of the “Regulation No. 9.”

The full name of the “Regulation No. 9” is the “Notice from the National Financial Regulatory Administration on Strengthening the Management of Commercial Bank Internet Lending Business and Improving Financial Service Quality” (Jingui [2025] No. 9), which officially took effect on October 1, last year.

It stipulates that: the head office manages all lending activities uniformly, establishes a unified risk control indicator system, and strictly monitors the scale, growth rate, concentration, non-performing rate, and compensation rate of each platform/product; banks implement a whitelist system for platform operators and credit enhancement service providers; the annualized comprehensive financing cost (loan interest + credit enhancement fee + all related costs) must not exceed 24%, among other measures.

Over the past decade, the domestic online finance industry has undergone multiple rounds of regulation and rectification, with many institutions and practitioners being eliminated. Who would have thought that the once low-profile lending industry could now face the “strictest new regulations,” pushing lending from the gray area into a front-line regulatory spotlight?

The days of platform relying on traffic to earn easy profits are gone. High-profit, high-interest loans will be tightly regulated, and the costs of compliant operations are rising. Platforms that cannot enter bank cooperation white lists or lack technological risk control capabilities will lose funding sources and eventually be eliminated.

In stark contrast, markets in Southeast Asia, Latin America, and Africa are still experiencing rapid growth—demand remains strong, and regulation is more lenient than in China; for example, actual annualized interest rates of 277% and doubling of total lending volume are real phenomena.

Veteran players are seeking new survival spaces, and newcomers like Kuaishou and ZuiMi, which possess large user bases and data, are eager to enter the online lending track to generate incremental performance.

At this point, going overseas has become a common choice for both old and new online lending players; however, this opportunity is no longer as easy to seize as before.

High Expectations for Going Overseas

Earlier this year, a widely circulated layoff chart summarized layoffs in the online finance, consumer finance, and lending sectors under the impact of Regulation No. 9. It showed, for example, that MaShang Consumer Finance’s tech department cut 93%, Shuhe Huabei cut 30%, Weixin Jinke’s backend cut 50%, and investment cuts reached 30%. The scale was shocking; even top platforms like Du Xiaoman were listed.

In fact, layoffs are just a superficial impact of Regulation No. 9. According to Q3 2025 financial reports, a slowdown is a common phenomenon across the entire lending industry: revenue growth is slowing, net profit margins are declining or even turning negative, and loan issuance is shrinking in scale—some platforms are continuously contracting.

Among leading platforms, Lexin’s revenue in the first three quarters of 2025 has been negative year-on-year for consecutive periods, a first in nearly three years of operation; Qifu Technology’s loan volume has decreased for three consecutive quarters, and the company estimates Q4 net profit will decline by 39%-49% year-on-year—also a first since its listing.

Compared to top platforms, small and medium-sized platforms are in a worse situation, facing the challenge of survival or collapse.

The Hong Kong-listed company BaiRongYunChuang (06608), dubbed the “First Stock of AI Financial Technology,” issued a profit warning at the end of February, estimating that the audited net profit for the year ending December 31, 2025, would be between 66.5 million and 79.8 million yuan, a decline of about 70%-75% from the previous year. About half a month after the warning, BaiRongYunChuang’s market value had evaporated by a quarter.

Shuhe Technology’s Q4 2025 net loss was approximately 684 million yuan; the company’s valuation also shrank by 73%.

Behind the decline in lending and income for lending platforms is a core factor: after Regulation No. 9, capital providers collectively retreated, cutting off the lifeline of the lending industry at its source. Securities Times reported that “monthly loan disbursements by lending platforms dropped from over 17 billion yuan at their peak to less than 3 billion yuan”; funds are concentrated in a few top platforms, while small and medium platforms face liquidity shortages.

Since the implementation of Regulation No. 9, many domestic banks’ lending cooperation platforms have sharply decreased, and overall industry funding has contracted significantly.

For example, in September last year, Urumqi Bank announced it would cease issuing cooperation-based personal internet consumer loans (including joint loans and lending assistance) from October 1, 2025. Jilin Yilian Bank’s partner referral and customer acquisition agencies dropped from 56 in 2024 to 11 by January 2026.

Domestic market space is being pushed to its limits. Besides adjusting domestic operations to comply with new regulations, platforms are urgently seeking to go overseas and expand their presence.

Companies like XinYe Technology, Jiayin Technology, Lexin, and Yiren Zhike have already started overseas operations, which now contribute a significant portion of their revenue.

XinYe Technology began its overseas expansion as early as 2018 and is considered the most successful and steadfast “pioneer.” In Q4 2025, overseas revenue reached a record high of 31.4% of total revenue. Overseas business is currently XinYe’s biggest highlight. Management is ambitious, aiming for overseas markets to contribute 50% of revenue by 2030.

Jiayin Technology is also aggressive in going abroad, officially launching overseas operations in 2018. Industry estimates show that in Q3 2025, overseas revenue accounted for 15%-20%. The overseas market has shifted from early testing and supplementation to a core engine for breaking growth boundaries. Management emphasized in earnings calls that overseas expansion is key to coping with domestic new regulations and diversifying growth.

Yiren Zhike also views going overseas as a second growth curve. In 2025, overseas revenue is about 4%, with a target of exceeding 10% in 2026 and reaching 15% in 2027.

In contrast, platforms backed by large companies with traffic advantages are more cautious about overseas expansion.

After withdrawing from the Indian market, Qifu Technology has set its sights on developed countries with sound legal and credit systems. During the Q2 2025 earnings call, Qifu mentioned progress in overseas expansion—launching small-scale operations in the UK, still in early stages but performing well on key indicators. They plan to continue refining risk models and improving conversion efficiency cautiously.

Baidu’s financial arm, Du Xiaoman, only started recruiting overseas staff in September 2025, preparing to enter the Mexican credit market.

By the end of 2024, Du Xiaoman’s microloan disbursement balance was 258.613 billion yuan, with consumer loans (ManYiDai) including credit assistance from trust and other financial institutions totaling 241.124 billion yuan, accounting for 93.24%.

In recent years, Du Xiaoman has aggressively marketed and expanded its lending scale. Lending has become a major driver of its success, but this also makes it highly dependent on lending, heavily impacted by Regulation No. 9 today.

For Du Xiaoman, besides complying with new lending regulations, going overseas has become more urgent, as they started late.

Emerging Markets Still a Hot Spot for Online Lending

A loan of 11,000 pesos, over 150 days, with a total repayment of nearly 14,300 pesos. Financial analysts estimate the actual annualized interest rate at an astonishing 277%. This is not a fantasy; it’s a real case of a Filipino rider borrowing on the Grab platform. Grab’s practices have not directly violated Philippine law.

Grab, headquartered in Singapore, is a well-known Southeast Asian internet company covering transportation, food delivery, and financial services. Its lending business mainly provides PayLater (buy now, pay later) services in Indonesia, the Philippines, Singapore, Malaysia, and Thailand. The business is diverse, with different products for consumers, riders, drivers, and merchants.

In recent years, Grab’s financial services have flourished in Southeast Asia, growing from uncertain prospects in 2021 to a loan balance of $1.18 billion and revenue of $347 million in 2025, accounting for 10% of total revenue—its fastest-growing business segment.

Sea is the dominant player in Southeast Asia’s online lending market. Its three core businesses are digital entertainment (Garena), e-commerce (Shopee), and digital financial services (Monee).

From Q4 2024 to Q4 2025, Monee’s quarterly revenue growth has remained above 50%, peaking at 70%.

Monee is currently Sea’s fastest-growing revenue engine and most stable profit source. In 2025, its adjusted net profit reached $1 billion, nearly 30% of Sea’s total net profit.

In Southeast Asia, XinYe Technology remains a top-tier Chinese brand. Southeast Asia is also the main overseas market for XinYe, with Indonesia and the Philippines as its primary bases.

In Latin America, Didi is the leading Chinese platform in Brazil and Mexico, far surpassing other Chinese platforms in scale and ranking.

Didi mainly relies on ride-hailing and food delivery (DiDi Food, 99Food) scenarios, offering personal consumer loans, driver loans, and credit cards. Over 25 million Latin Americans are already using Didi’s digital banking services.

OPay, another Chinese brand, has become a major player in Africa. It was incubated by Kunlun Wanyuan through the acquisition of the browser company Opera.

Currently, OPay focuses on Nigeria and Egypt, with mobile payments and digital finance at its core. It ranks first in Nigeria’s mobile payment market and is called the “Alipay of Africa.” Public data shows that in the first half of 2025, OPay’s GMV reached $28 billion, a 60% year-on-year increase.

The rapid rise of these brands reflects the explosive growth of online lending markets in Southeast Asia, Africa, and Latin America.

According to the “Southeast Asia Digital Economy Report,” the compound annual growth rate of Southeast Asia’s internet credit market from 2020 to 2024 is about 22%. KPMG predicts that from 2026 to 2031, the industry’s CAGR will reach 15.8%, with the market size surpassing $348.1 billion by 2031 (including consumer finance, cash loans, installment plans, and all categories).

Besides Southeast Asia, Africa is also one of the fastest-growing regions for online lending globally. Public data indicates that Africa’s digital credit market will reach about $50 billion in 2025, with a CAGR of over 20% from 2025 to 2030.

Latin America’s online lending market is smaller, about $2.9 billion in 2025, expected to grow to $3.6 billion in 2026, with a 24% annual growth rate. However, credit penetration in Latin America is only around 40%, with digital credit accounting for just 4%-5%, far below Southeast Asia’s 15%+, leaving huge room for development.

This enormous potential attracts Chinese internet and tech companies to venture overseas, hoping to replicate the golden decade of China’s online lending boom.

Under this temptation, not only are veteran players eager to enter emerging markets, but new entrants continue to join. Kuaishou and ZuiMi are typical examples.

Kuaishou’s overseas lending operations began preparations in 2024, with lending services launched in Brazil in 2025.

Kuaishou is expanding overseas, and ZuiMi Finance is also going abroad. Reports indicate that after publicly recruiting high-salary managers for cash loans in Mexico and Brazil last year, ZuiMi has tested cash loan services in Nigeria, the Philippines, and other countries. Both are still in early testing phases.

Risks of Going Overseas Are Increasing

Emerging markets in Southeast Asia, Latin America, and Africa have large populations, a high proportion of young people, increasing internet penetration, and underdeveloped traditional financial systems. Many users cannot access convenient financial services, creating huge unmet demand.

Policy environments are relatively relaxed and friendly. Most emerging countries have introduced policies to promote financial inclusion and support fintech development, lowering barriers to entry for internet finance companies.

However, the flip side of these opportunities also harbors many challenges and risks. As numerous online lending brands flood into emerging markets, risks are intensifying.

These regions have extremely weak credit infrastructure. For example, in Indonesia and the Philippines, central bank credit coverage is below 30%, and most users have no credit records. In Africa, many users lack IDs and bank accounts; countries like Nigeria and Kenya have credit coverage below 15%.

Chinese online lending brands’ risk control models, developed in China, are not suitable overseas, resulting in high bad debt rates and low collection efficiency. Globally, aggressive, harassing, and humiliating collection methods are being cracked down on, and users are increasingly aware of anti-collection measures. Some malicious borrowers have even filed complaints claiming “foreign usury,” leading to fines or app removal for platforms.

Regulation in emerging markets is tightening, and given current geopolitical tensions, policy changes are unpredictable.

For example, in the Philippines, during the early explosive growth of cash loans, many unlicensed platforms offering “instant approval, unsecured, high-interest” loans proliferated. It wasn’t until 2019 that online lending was regulated, requiring registration, disclosure of effective annual interest rates (EIR), and banning unfair collection practices. By 2025, regulatory pressure intensified, forcing many Chinese lending apps to delist due to “high interest + harassment.”

In India, early online lending operated in a regulatory vacuum and in a brutal survival environment. In November 2020, a well-known Indian screenwriter committed suicide due to high-interest online loans and violent collection practices, sparking nationwide outrage. Indian regulators then began tightening controls.

The 2022 “Digital Lending Guidelines” mandated that all lending data be stored on servers within India and prohibited cross-border data transfer. This rendered cross-border big data risk control models, relied upon by Chinese platforms, ineffective.

Between 2024 and 2025, India launched a comprehensive crackdown on online lending, explicitly capping annual interest rates at 24%, effectively ending high-interest lending. Even more severe, illegal collection activities can lead to criminal charges, with maximum sentences of 10 years, and unlicensed lending is classified as cyber financial crime.

At the peak, one in three online lending platforms in India had Chinese backing. By December 2025, India banned 87 illegal cash loan apps, nearly wiping out Chinese platforms. Ant Group, Xiaomi, Qifu, and others withdrew from India, suffering heavy losses. Industry estimates suggest Chinese capital lost billions of dollars in the Indian online lending market.

Similar regulatory tightening is happening in some African and Latin American countries; overall, emerging markets are increasingly regulating online lending.

Today’s overseas online lending market is both a “refuge” for Chinese internet/tech companies to hedge domestic regulatory pressure and a new battlefield full of risks and opportunities.

For Chinese companies, ensuring the safety of their “tools” before venturing abroad is crucial.