According to a report by the China Banking Association, consumer finance companies provided financial services to 85.43 million county-level customers in 2024. As these services extend to rural households, enabling millions to access financial support, the industry must balance business growth with compliance, upholding the principle of "finance for the people."
**Strengthening Third-Party Oversight** Today, almost every licensed consumer finance company lists its loan facilitation partners on its official website. Data shows that 29 companies disclosed partnerships with an average of 21.66 platforms each. While such collaborations help bridge gaps in customer acquisition, risk control, and cost reduction, regulatory penalties reveal persistent lapses in partner management.
In early December, Xiamen Jinmeixin Consumer Finance was fined 1.2 million yuan for inadequate third-party oversight, consumer rights protection gaps, and lax loan reviews. By year-end, regulators had penalized six firms, totaling 8.85 million yuan in fines. Common violations included "poor cooperation management," as seen in cases involving Ningyin Consumer Finance and Beijing Sunshine Consumer Finance.
A regulatory notice in April, effective October 1, has triggered industry-wide adjustments. Some banks halted internet-based consumer loans, while finance firms trimmed partner lists, shifting from broad outreach to strict vetting.
"Compliance now permeates every business stage," noted Su Xiaorui, a senior researcher. "Companies must prioritize risk control, post-loan management, and emerging areas like data security and inter-institutional collaboration."
**Safeguarding Consumer Rights** Weak third-party management often undermines consumer protections, leading to over-lending, identity fraud, or eroded borrower rights—issues that harm both individuals and the sector.
The "15th Five-Year Plan" emphasizes boosting consumption and strengthening consumer protections. New regulations link companies’ ratings to their performance in this area. Dong Ximiao, a chief researcher, advocates embedding consumer rights into corporate governance and daily operations, particularly in managing partners and outsourcing like debt collection.
Some firms now disclose progress via annual or ESG reports. For example, Bank of China Consumer Finance revised its data protection policies, while Zhongyuan Consumer Finance established clear accountability frameworks.
Digital solutions are also enhancing protections. Leading the fight against financial fraud, Mafang Consumer Finance built a collaborative network covering 138 institutions, aiding in 607 illegal proxy dispute cases in 2024.
Balancing growth with compliance remains key. As the industry evolves, aligning innovation with regulatory rigor will ensure finance truly serves the public—a cornerstone for sustainable development.
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