Loan intermediaries go quiet as tighter rules hit China's fintech lending sector

In recent weeks, loan intermediaries who once flooded social media with aggressive marketing—shouting slogans like “instant approval” in WeChat朋友圈—have gone quiet. Many have deleted past posts, changed their profile names, and dissolved client groups. Some now restrict their朋友圈 to “visible for the last three days only.”

The shift stems from the upcoming implementation of the Measures for the Administration of Online Marketing of Financial Products (hereinafter “the Measures”), effective September 30. Under the Measures, organizations or individuals other than financial institutions and third-party internet platforms are prohibited from conducting or covertly engaging in online marketing of financial products.

Since the Measures were introduced, a series of regulatory “combined punches” have been rolled out, triggering a systemic restructuring of the loan facilitation (助贷) industry. Experts believe the era of unchecked growth has ended, and compliance capability will become the baseline for market entry.

Industry Retreat

Although the Measures apply to all financial institutions and products, they impose a “radical” constraint on loan facilitation platforms at the customer acquisition stage, directly targeting the industry’s dominant traffic-generation model.

Previously, nearly every medium capable of reaching audiences—from Xiaohongshu to Xianyu, Douyin to Kuaishou, and WeChat朋友圈 to QQ—was used as a traffic conduit by loan intermediaries and facilitation platforms. To bypass platform oversight, intermediaries even developed coded jargon such as “black households” and “white households.” These practices now face stringent regulation.

“The era of loan intermediaries freely posting advertisements is over,” said Zhang Guojia, a lawyer at Jiangsu Saint King Law Firm. He explained that if a loan intermediary posts a loan ad on WeChat朋友圈 without formal authorization from a financial institution, it constitutes “an organization or individual covertly conducting online marketing of financial products,” violating Article 2 of the Measures. Even with authorization, intermediaries cannot publish under titles like “×× Loan Center” or “×× Credit Consultant”; only financial institutions may publish product information in their own name.

Zhang noted that intermediaries can only serve as “channels,” not “speaking entities.” Common phrases in loan intermediary posts—such as “black households eligible,” “instant approval and disbursement,” “interest rates as low as,” and “no fees”—are all违规.

Beyond banning misleading language and marketing by unlicensed entities, the Measures also prohibit:

• Multi-level sub-entrustment and “matryoshka-style” traffic diversion
• Bundling payments with credit products
• Redirecting users only to financial institutions’ self-operated platforms
• Covert API-based traffic diversion

The Measures represent only one part of the regulatory “combined punches.” Since last year, several policies related to the loan facilitation industry have been introduced. Among the most impactful is the Notice on Strengthening the Management of Commercial Banks’ Internet Loan Facilitation Business to Improve Financial Service Quality and Efficiency (the “New Loan Facilitation Rules”), effective October 1, 2025. The New Rules set bottom lines for institutional准入 and cost ceilings in internet loan facilitation. Although they directly target commercial banks, they indirectly but powerfully constrain facilitation platforms through banks’ cooperative management responsibilities.

The Regulations on Explicit Disclosure of Comprehensive Financing Costs for Personal Loans (the “Cost Disclosure Rules”), effective August 1, 2026, further translate cost constraints into disclosure obligations verifiable by borrowers.

Together, these three policies form a progressive constraint system covering准入 cooperation, cost pricing, and marketing channels.

“This set of policies effectively declares the end of the野蛮 growth phase for the loan facilitation industry. Going forward, compliance and asset quality will be core,” said Wang Pengbo, chief analyst at Botong Consulting. “The industry will no longer be a simple traffic monetization business. Relevant institutions must build implementable risk control systems that match capital providers’ demand for stable operations. Compliance capability will become the baseline for market competition.”

Collapse of the Old Model

“Doing this business this year is really tough,” said an industry insider. With regulatory pressure intensifying and red lines clearly drawn, even minor non-compliance carries significant legal risk. Many peers have been summoned for talks, and many have chosen to suspend operations for restructuring.

“After the Measures take effect, even veterans will disappear in droves. If you haven’t entered the industry, don’t,” another loan intermediary added.

Recently, multiple Notices related to standardized operations of loan intermediaries have circulated widely in the industry, drawing high-voltage red lines for behaviors such as impersonating banks or other financial institutions for marketing and traffic generation, forging documents, illegal lending, AB loans, and predatory lending.

Wang Pengbo analyzed that the rights and responsibilities in loan facilitation are being redefined. Facilitation institutions will return to their roles as technology and channel service providers, shifting focus from simply reselling traffic to outputting risk control and operational capabilities. Meanwhile, capital providers will prioritize asset quality and compliance when selecting partners. The model of relying solely on traffic for cooperation will be difficult to sustain.

“Based on our observations, small and medium-sized facilitation institutions will face significantly greater difficulty in securing funding. Resources will continue to tilt toward leading institutions with完善的 risk control systems and compliant rectification. Platforms relying on high customer interest rates and marketing packaging will see business scale shrink. Institutions lacking sufficient capital and technology for rectification will have to scale down or exit. The industry’s ‘Matthew effect’ will become more pronounced,” Wang said.

Another industry insider noted that while the loan facilitation industry will not disappear, it is shifting from a “growth logic” to a “survival logic”—the beginning of a long-term restructuring. Previously, many facilitation companies operated on a model of “high pricing to cover risks, high conversion to dilute acquisition costs, and high turnover to amplify scale.” That model is now failing.

Headline Performance Declines Across the Board

Even leading facilitation platforms have experienced sharp performance declines amid tightening regulation. According to Q2 2026 earnings reports, seven listed loan facilitation companies saw near-universal business contraction, with profit declines far exceeding revenue declines, signaling a systemic reassessment of existing profit models.

Business Scale:

• Qifu Technology (03660.HK): Q2 loan origination of 63.377 billion yuan, down 25.1% YoY; outstanding loan balance of 107.562 billion yuan, down 23.2% YoY.
• FinVolution (FINV.N): Q2 loan origination in mainland China of 41 billion yuan, down 19.3% YoY; outstanding balance of 65.4 billion yuan, down 13.3% YoY.
• X Financial (XYF.N): Q2 loan origination of 11.63 billion yuan, down 20.5% QoQ and 70.2% YoY; outstanding balance of 24.97 billion yuan, down 29.2% QoQ and 61.5% YoY.
• Vcredit (02003.HK): H1 loan origination in mainland China of 5.69 billion yuan, down 85.0% YoY; outstanding balance of 7.73 billion yuan, down 64.5% YoY.
• Jia Yin Technology (JFIN.O): Q2 loan origination of 9.5 billion yuan, down 74.4% YoY.
• Lufax (06623.HK): Outstanding balance of 167.3 billion yuan as of Q2 end, down 13.5% YoY.
• Lexin (LX.O): The only platform to post growth, with Q2 loan origination of 55.4 billion yuan, up 4.8% YoY, but outstanding balance still fell 11.4% YoY to 93.7 billion yuan.

Asset Scale: Except for FinVolution, whose total assets as of end-June 2026 edged up 2.60% from the start of the year, the other six companies all saw declines. X Financial fell 17.48%, and Vcredit plunged 41.49%.

Profitability: The contraction in business scale directly impacted income statements:

• Qifu Technology: H1 revenue of 7.476 billion yuan, down 24.54% YoY; net profit attributable to shareholders of 1.289 billion yuan, down 63.52% YoY.
• FinVolution: H1 revenue of 6.613 billion yuan, down 6.31% YoY; net profit of 857 million yuan, down 42.64% YoY.
• Lexin: H1 revenue of 6.496 billion yuan, down 2.92% YoY; net profit of 303 million yuan, down 67.85% YoY.
• X Financial and Vcredit: H1 revenue down 48.47% and 61.23% YoY, respectively; net profit down 91.39% and 94.44%, to just 85 million yuan and 12 million yuan.
• Jia Yin Technology: Swung to a loss, with H1 net loss of 245 million yuan (Q2 alone: 184 million yuan).
• Lufax: H1 net loss of 694 million yuan, compared to a loss of 519 million yuan in the same period last year.

“Going forward, the overall profit margin of the loan facilitation industry will narrow. Facilitation institutions can only rely on refined operations and technology to compress costs and preserve profits,” Wang Pengbo concluded.

(This article is from Yicai.)