China-Singapore Jingwei Client, January 14th (Song Yafen) Consumer finance companies usher in a regulatory rating policy, and companies that do not meet the standards may face the risk of exit.
On January 13, the General Office of the China Banking and Insurance Regulatory Commission issued the "Measures for the Supervision and Rating of Consumer Finance Companies (Trial)" (hereinafter referred to as the "Measures").
The "Measures" stipulate that consumer finance companies that have been established for more than one full fiscal year will be subject to regulatory ratings. Consumer finance companies with a regulatory rating of level 5 may face rescue plans such as mergers, acquisitions, reorganizations, and the introduction of strategic investors. Even withdraw from the market.
Why does the regulator formulate a rating policy for consumer finance companies?
What impact will classified management have on the consumer finance industry?
It is understood that the upgrading of the supervision of consumer finance companies has an important relationship with their development and growth.
Currently, 30 licensed consumer finance companies have been approved in China, of which 27 have opened.
Many banks and companies are lining up to enter the consumer finance industry.
After the number increases, the upgrading of industry supervision is imperative.
Speaking of the rating policy, Chen Wen, director of the Digital Economy Research Center of the School of Finance of Southwestern University of Finance and Economics, told the Sino-Singapore Jingwei Client: "The reason is that consumer finance companies have gradually accelerated their approval speed in the past two years, and their position or role in the entire financial market. It is gradually improving. The promulgation of grading policies is mainly due to the consideration of risk prevention and supervision."
Xue Hongyan, deputy dean of the Suning Financial Research Institute, also pointed out that consumer finance companies are replacing online small loan companies as a platform for industrial capital deployment in the consumer finance industry.
Rating consumer finance companies in accordance with unified rules will help promote the standardization and transparency of industry supervision, improve the comparability of regulatory rules in different regions, and eliminate regional-based regulatory arbitrage to a certain extent.
Dong Ximiao, chief researcher of China Merchants Union Finance, said that in general, consumer finance companies have developed prudent and steady development and are showing a good development trend. However, as competition in the consumer finance market intensifies, some consumer finance companies have faced challenges in their operational compliance and development stability.
As the number of consumer finance companies increases, the development direction, business model, and customer positioning are differentiated, and differentiated supervision should be implemented.
In addition, the source of funds for consumer finance companies also hides risks.
Consumer finance companies cannot absorb deposits, and obtain funds mainly through channels such as their own funds, inter-bank lending, bond issuance, and ABS.
Chen Wen pointed out that if there is a problem in the consumer finance industry, a large number of risks will gather in commercial banks.
Therefore, from this perspective, a strong supervision is needed.
"At the same time, consumer finance companies are partly derived from the traditional banking system, which is fairly passable relative to the concept of risk control. However, there are still many Internet companies that have transformed their original mutual financial institutions to consume money. If they are allowed to develop savagely like the previous Internet finance, there will be It may repeat its mistakes, so a stricter supervision and risk prevention is required." Chen Wen added.
From the perspective of rating indicators, the rating system also has important guiding significance.
The "Measures" show that consumer finance companies' regulatory rating elements include five aspects, namely: corporate governance and internal control, capital management, risk management, professional service quality, and information technology management.
The rating elements are composed of two types of rating indicators, quantitative and qualitative.
The standard weight distribution of each rating element is: corporate governance and internal control (28%), capital management (12%), risk management (35%), professional service quality (15%), and information technology management (10%).
Xue Hongyan's analysis pointed out that in the era of extensive management, corporate governance issues have always been the industry's weakness. The rating system gives this indicator a weight of up to 28%, which can well promote the continuous improvement of the industry and optimize the corporate governance structure.
The introduction of regulatory ratings is expected to weaken the industry's profit-oriented operating orientation and neutralize the problems caused by the scale-only and profit-only orientation.
Dong Ximiao believes that improving the corporate governance of small and medium-sized financial institutions has been a key task of regulatory authorities in recent years.
The two weights of corporate governance, internal control, and risk management total 63%, highlighting the emphasis on corporate governance and risk management, conforming to the reality of consumer finance companies, and having strong pertinence and guidance.
In addition to making the development of consumer finance companies more standardized, supervision may also bring new development opportunities to consumer finance companies.
Chen Wen said: “Relying on the rating results, it is expected that some business innovations in the consumer finance industry may be applied in the future. The stronger the risk control ability and the better the governance, the company may be allowed to carry out some corresponding innovative businesses.” China-Singapore Jingwei APP)
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