Broke and In Debt, China's Gen Z Adjusts to Life Without Easy Credit

China’s 36 million university students are starting to learn what it’s like to live without easy credit, Bloomberg News reported. Last month authorities effectively shuttered student access to the once ubiquitous online loan industry, a sprawling collection of apps, fintechs and other unregulated lenders. Internet platforms were told to stop offering online loans to students and unwind existing credit. Banks will need to seek regulatory approval before promoting such loans on campus. The crackdown is both part of a wider regulatory push to curb the entire fintech sector and a response to specific abuses by lenders targeting college students. Historically there were next to no affordability checks on short-term loans to students, where annualized rates are typically between 15% and 24%. Over the last few years, local Chinese media have reported a series of shocking incidents related to the sector from debt collection by way of intimidation to even victims being forced into the sex trade to pay off debts. Yet the sudden withdrawal of credit is leaving those already indebted with few places to turn. Read more.
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