The original idea for P2P lending websites was that they were only a platform to match people with spare cash and those who need to borrow money. A typical transaction could see someone with cash to spare lend 5,000 yuan to a young couple wanting to decorate their new home.
The attraction for lenders is that expected rates of return are mostly above 10 percent and some exceed 20 percent. In contrast, the annual interest rate on a one-year term deposit at banks is 3.25 percent.
The industry started to take off in 2009, and now it is worth nearly 60 billion yuan.
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Li Xiaoxiao and Yang Lu via CHINA US Focus http://feedproxy.google.com/~r/ChinaUsFocus/~3/v6P3QBLb_MI/
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