69 troubled P2P lending platforms reported in China in Jan

GUANGZHOU -?Sixty-nine P2P (peer-to-peer) lending platforms ran into trouble in January, according to Wangdaizhijia, a web portal that tracks the industry.

This is the second highest monthly figure after the 92 in December.

Ma Jun, chief researcher with Wangdaizhijia, said the platforms either went bankrupt or had difficulty in withdrawing funds as a result of frauds or demands for funds ahead of Lunar New Year.

Rising defaults and weak risk control were also among the factors, said Ma.

The most notable case is one in Beijing where investors lost 934 million yuan ($149 million).

Last month, 121 new P2P lending platforms were launched, raising the total number of operational platforms nationwide to 1,627.

P2P lending, with much higher returns than bank deposits, is very appealing to ordinary Chinese whose investment channels are limited. It is estimated that 290,000 private lenders have invested via P2P platforms.

The trading value of P2P platforms hit 250 billion yuan in 2014, doubling the 2013 amount, according to the Internet Society of China, but 275 platforms failed last year.

These platforms are supposed to live by brokering agreement between borrowers and lenders, and are prohibited from pooling investors' money to fund their own projects.

The China Banking Regulatory Commission in September 2014 vowed to tighten regulations on P2P businesses, including new registration rules, third party funds trusteeships and external audits.

The year ahead will be tough for surviving P2P lenders as a large number of online borrowing projects will mature. The new rules are expected to trigger the first round of reshuffling in the industry.