Fintech lenders face shockwaves of Chinese loan app crisis

Many lending startups, including VC-funded ones, are finding themselves at the receiving end of police action meant to target unregulated entities issuing loans at usurious interest rates

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By 

Pratik Bhakta

June 08, 2021

4 Min Read

If stress on the balance sheet and repayment pressures due to Covid-19 were not enough, fintech lenders are now grappling with the fallout of the crackdown on shady Chinese loan apps that jolted the sector last year.

Law enforcement agencies have in recent months frozen the bank accounts of multiple regulated and consumer-focussed fintech lending startups as well. 

“We heard from our bank branch in Hyderabad that our account has been frozen under instructions from the local police,” said a top executive at one of these startups.

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