New regulations for loan assistance in the past six months: risk control has tightened, customer base has shrunk, and profit models have changed.

“Adjusting the cost structure and tightening risk control for sinking customers are the more obvious shifts we have made in response to the performance decline pressure and regulatory compliance tests after the implementation of the new lending regulations. To this end, we have specifically optimized the customer screening plan and supporting risk assessment systems, big data push systems, and others,” said Zhang Qiang (pseudonym), a business leader at a leading microloan institution, to China Securities Journal.

The “Notice on Strengthening the Management of Commercial Bank Internet Microloan Business and Improving Financial Service Quality” has been in effect for over half a year, and the internet microloan industry has entered a stage of deep transformation, with profit models and risk control logic rewritten: bank cooperation “white lists” are shrinking, and small- and medium-sized platforms are accelerating their exit; microloan institutions are reducing their business scale and urgently seeking new profit growth points.

● Reported by Shi Shiyu

Cooperation institutions shrink, driving two-way selection

“One of the main changes brought by the new microloan regulations is the shrinking and refined management of bank cooperation institutions. Due to compliance and risk control considerations, banks prefer to cooperate with leading institutions,” Zhang Qiang told reporters. “The new regulations require banks to bear responsibility for reviewing the entry conditions of cooperation institutions. If issues arise with a partner, the bank may be held accountable. Additionally, banks are not allowed to cooperate with institutions outside the publicized list, which shifts banks from a ‘broad net’ approach to a ‘prudent selection’ approach.”

The new microloan regulations clearly state that commercial banks engaging in internet microloan business should adhere to principles of centralized management at the head office, matching rights, responsibilities, and benefits, reasonable risk pricing, and moderate business scale; they should strengthen access management for platform operating institutions and credit enhancement service providers, carefully formulate access standards, conduct due diligence effectively, and approve strictly.

On March 5, Blue Ocean Bank updated its list of 68 internet loan platform operating institutions, with 40 marked as “suspended.”

Yilian Bank’s internet loan cooperation referral and customer acquisition institutions, which had 11 in January 2024, were adjusted to 10 by February 2026. Since September 2025, when the bank’s online loan cooperation platform was drastically reduced from 56 to 10, it has only made minor adjustments to the cooperation list this year.

Additionally, some banks have expanded their cooperation institution lists and made refined adjustments. For example, Guangdong Huaxing Bank’s internet loan cooperation institutions increased from 17 to 20 in January this year, but the bank did not simply add more; after removing some partners, it added new ones.

Multiple industry insiders have learned that banks and microloan institutions are gradually shifting toward “two-way selection.” “Previously, microloan institutions actively sought cooperation with banks, and banks had absolute say in choosing microloan institutions. After the new regulations, because the comprehensive financing cost cannot exceed 24%, microloan companies are more practically focused on cost reduction, and some high-cost small- and medium-sized banks are being rejected by leading microloan institutions,” said Wang Nan (pseudonym), a senior business leader at a leading microloan company.

Limited customer scale, seeking profit growth points

The strict control of comprehensive financing costs under the new regulations directly impacts the profit models of microloan platforms.

The new regulations require that platform operating institutions cannot charge interest or fees to borrowers in any form, and credit enhancement service providers cannot increase fees through consulting or advisory fees. This means the previous profit model based on superficially low interest rates and high service or membership fees is now fully restricted.

“The 24% comprehensive financing rate limits the profit ceiling for individual loans and effectively restricts the growth of our effective customer base. During our system evaluation, borrowers with a total loan interest rate exceeding 24% are directly rejected,” said Zhang Qiang.

“From our observations in recent years, the customer base and loan demand with a comprehensive loan rate below 24% are gradually decreasing, with almost no new customer acquisition. The repeat loan rate in the microloan industry is very high—over 90% for several leading institutions—and profits mainly come from existing customers refinancing. However, the number of old customers is shrinking, putting pressure on overall operational efficiency, prompting some institutions to seek profit growth overseas,” said a senior industry insider.

“On the cost side, our advertising and referral expenses have not decreased, but the success rate of matching has fallen,” said the senior industry insider. “For example, previously, when pushing referral ads to 10 people, about 7 would successfully match. Not all of these 7 would meet risk assessment requirements, but they were willing to pay extra to get a loan, with a combined fee rate possibly exceeding 24%. Now, with the 24% cap, only three or four out of 10 people who receive the referral information meet the requirements and succeed in matching, but the costs for referral and operation have not decreased—in some platforms, these costs have even increased to expand the push audience.”

The changes brought by the new regulations are reflected in performance, with some companies experiencing a contraction in business scale and operational pressure in Q4 2025. For example, Qifu Technology’s 2025 performance report shows that in Q4 2025, the total matched and initiated loan scale was 70.3B yuan, down 21.8% from 89.89B yuan in the same period of 2024, with a net profit of 1.0161 billion yuan, down 29.1% quarter-on-quarter. Similarly, Xin Ye Technology’s annual revenue and net profit increased in 2025, but Q4 revenue fell 12.7% year-over-year, and net profit dropped 38.2%, with transaction volume in that quarter down 24.8% year-over-year.

Wu Haisheng, CEO and director of Qifu Technology, stated: “In Q4 2025, macroeconomic uncertainty and regulatory policy changes led to tighter liquidity and increased risk levels across the industry, posing severe challenges to our operations. In response, we proactively made adjustments, including raising risk control thresholds, restructuring business, and optimizing costs to mitigate adverse effects. Given the intertwined challenges of regulatory changes and macroeconomic environment, the industry has not yet stabilized, and we will continue to adopt cautious business planning.”

“One-Page Disclosure” supports transparency of interest and fee costs

Recently, the Financial Regulatory Authority and the People’s Bank of China jointly issued the “Regulations on Explicit Disclosure of the Total Cost of Personal Loan Business” (referred to as “One-Page Disclosure”). Many industry insiders see this as a positive step toward further compliance in the microloan industry.

The “One-Page Disclosure” clearly includes all costs related to personal loans into the comprehensive financing cost, forming a clear disclosure table that covers, but is not limited to, the interest, installment fees, credit enhancement fees, and other financing costs borrowers need to pay under normal performance, as well as late penalty interest and contingent costs in case of default.

Dong Ximiao, Chief Economist at Zhaolian and Deputy Director of the Shanghai Financial and Development Laboratory, believes that explicit disclosure of the comprehensive financing cost for personal loans is significant for addressing information asymmetry in personal credit, safeguarding consumers’ right to know and choose, regulating the loan market, and building a healthy financial ecosystem.

“The core of the cost disclosure is for institutions providing personal loans to clearly display the annualized comprehensive financing cost, summing all interest, service, and guarantee fees, making the true costs behind ‘low interest’ and ‘interest-free’ marketing transparent. This helps consumers compare options rationally, promotes lower financing costs, and protects their legitimate rights,” Dong said.

Industry insiders believe that “One-Page Disclosure” not only helps microloan institutions improve service quality but also acts as a form of protection for them. “Currently, there are many black and gray anti-collection operations, some of which exploit loopholes in regulations to include reasonable late fees and other costs in the comprehensive financing cost to maliciously accuse us of exceeding 24% interest. We need to invest significant manpower and effort to resolve such issues. The ‘One-Page Disclosure’ makes all fees clear, greatly reducing the space for malicious complaints,” said Zhang Qiang.

“‘One-Page Disclosure’ helps prevent microloan institutions from arbitrarily charging high hidden fees, making all interest and fees transparent, traceable, and visible,” said Wang Nan.

However, Wang Nan also admitted that completely eliminating high-interest variants like “monthly financing担” and “rent-to-own loans” still requires joint efforts. “There is still a market for customers willing to pay over 24% interest, and where there is demand, there will be supply. Some illegal high-interest lenders may become more covert, changing ‘masks’ to evade regulation.”