alt Hacker NewsSeems like a pretty terrible idea in hindsight, destroying private lending, given how desperately the government is trying and failing to raise domestic consumption now.
Seems like a pretty terrible idea in hindsight, destroying private lending, given how desperately the government is trying and failing to raise domestic consumption now.
The private lending held back involved a) high interest rates b) unconventional methods of governance/collections which would be somewhat decoupled from Ant's lending platform down to the local level of collections.
An example of the ugly side of China private lending is what is termed "flesh loans". A young girl is forced to have nude pictures taken of her to secure her high interest loan repayment. Ant was going to put hundreds of billions in capital backing loans that had loosely controlled and often unethical/violent collections system.
Yes, curtailing loads of easy capital can be at odds with pressing domestic consumption growth. In this case, I think the government made a tough but decent decision.