MUMBAI • Yidai, an online peer-to-peer (P2P) lending intermediary, is the latest to exit the business as China reins in its US$176 billion (S$240 billion) experiment with this riskier form of financing.
The company set up a committee to start refunding its lenders after "months" of losses, Yidai said in statements over the extended holiday weekend.
It has about 32,000 lenders with an outstanding principal balance of four billion yuan (S$796 million), and expects to repay them in three to five years.
Yidai, which received investment from SoftBank China Venture Capital in 2014, also said shareholders and executives are not allowed to leave the country.
Chinese leaders are dramatically shrinking a market that spawned the nation's biggest Ponzi scheme, protests in major cities, and life-altering losses for thousands of savers.
The authorities are planning to wind down small and medium-sized P2P lending platforms nationwide, people with knowledge of the matter had earlier said.
The move is in line with President Xi Jinping's broader crackdown on shadow banking.
In China, P2P platforms comprise one of the riskiest and least regulated slices of the system. The lack of oversight allowed for world-beating growth, with outstanding P2P loans ballooning from almost nothing in 2012 to 1.22 trillion yuan in December 2017.