China bans micro lenders from granting consumer loans to university students

China’s Banking and Insurance Regulatory Commission (CBIRC) and four other government bodies have specified that all micro loan firms in the country cannot extend consumer loans to university students.

Nevertheless, banks have been allowed to extend consumer loans to students to meet their reasonable needs, but only if parents are willing to continue paying if their children are unable to do so

This occurs after the increase in the use of illegal apps to which students in disrepair for credit went, for which they ended up paying high interest rates

Irregularities could subject micro lenders to penalties such as business suspension and a withdrawal of their license