Crowdfunding in China: The Financial Inclusion Dimension

Date Published: 
Jul 2017
Aveni, T. & Jenik, I.

Will China's size translate into improved access to finance for the poor?

Last year, peer-to-peer (P2P) lending in China surpassed the USD 100 billion threshold and confirmed China as the world’s largest P2P lending market, leaving North America a distant second. For some time, Chinese regulators refrained from interventions and let the industry grow and evolve - taking a "wait-and-see" approach. While this has helped to grow the industry, it has also created some issues, including platform failures and practices that might not always be considered healthy innovations.

This brief is written for researchers, development professionals, industry participants, and policy makers interested in crowdfunding and peer-to-peer (P2P) lending, and how those phenomena have been playing out in China in the context of efforts to promote financial inclusion through digital financial services and FinTech. In this brief, the authors: 

  • Provide an overview of the crowdfunding industry in China, with a specific focus on P2P lending;
  • Describe the wait-and-see approach;
  • Examine potential significance of P2P lending for financial inclusion;
  • Outline policy lessons gleaned from the development in China.