Core Viewpoint - The "24+" credit business faces significant challenges following the recent "assistance loan regulations," which may limit its operational space, yet there remains skepticism about the complete disappearance of this market [1][5]. Group 1: Market Existence and Demand - The existence of the market is not synonymous with demand; customers seek credit rather than specifically "24+" credit, indicating that the subprime credit market may persist under certain risk-cost considerations [2]. - The new regulations set a clear interest rate cap of 24% for credit business conducted by banks and assistance platforms, but there may still be loopholes in product design that allow for additional fees to be charged [2][3]. Group 2: Potential Product Structures - One potential structure involves charging "24% + platform service fees" or "24% + platform rights," where these additional charges are designed to appear separate from the loan product, potentially avoiding inclusion in the "comprehensive financing cost" [2][3]. - Another approach could involve using alternative funding sources, such as small loans combined with credit guarantee insurance, which may allow for continued operation in the "24+" market despite the new regulations [3][4]. Group 3: Industry Sentiment and Future Outlook - Many platforms are currently in a state of observation, uncertain about the sustainability of "24+" operations post-regulation, but they acknowledge that those focused on this market will face significant performance and operational pressures in the near term [5][6]. - The long-term outlook for the "24+" market appears bleak, with leading platforms and institutions gradually exiting, and smaller banks facing increasing challenges as their net interest margins shrink [6].

Core Viewpoint - Concerns regarding the potential termination of loan products with annual interest rates of 24%-36% are quietly reshaping the current landscape of the lending industry [1][8]. Summary by Sections Regulatory Changes - The National Financial Regulatory Administration issued new regulations on April 1, 2023, which will take effect on October 1, 2025, mandating that commercial banks manage lending platforms and credit enhancement service providers through a list system [5][6]. - The new regulations stipulate that the comprehensive financing cost of lending services must not exceed 24%, and all fee structures must be fully disclosed [7][8]. Impact on Lending Institutions - Many banks are withdrawing from partnerships with lending institutions that primarily offer loans at 24%-36% interest rates, fearing that these products may be phased out under the new regulations [11][14]. - As a result, lending institutions that rely on these high-interest products are facing reduced funding and are forced to cut marketing and operational costs to survive [8][9]. Market Dynamics - Some banks that continue to offer 24%-36% interest loans are raising their funding costs, with some quoting rates as high as 8%, making these loans less profitable [15][24]. - The withdrawal of banks from high-interest lending is leading to a concentration of resources among larger, more established lending firms, while smaller institutions may struggle to meet new compliance requirements [9][13]. Future Outlook - There are differing opinions on whether the 24%-36% interest rate loans will be completely eliminated. Some believe that strict interpretations of the new regulations will enforce a cap at 24%, while others think that there may still be room for these products under certain conditions [18][19]. - The "dual guarantee" model, which allowed for higher effective interest rates through complex arrangements, is expected to decline as regulatory scrutiny increases [21][22]. Strategic Responses - Some smaller banks are showing interest in the 24%-36% interest rate loans to expand their retail loan portfolios, despite concerns about regulatory risks associated with cross-regional operations [24][25]. - To attract these banks, lending institutions are offering higher profit-sharing arrangements, including guaranteed returns for banks involved in these high-interest loans [25].

Core Viewpoint - The new regulations issued by the National Financial Supervision Administration aim to enhance the management of internet lending services by commercial banks, targeting long-standing issues in the industry such as the "dual guarantee" model and ensuring compliance with risk pricing and cost transparency [1][2][3]. Group 1: Regulatory Changes - The new regulations, effective from October 1, require banks to avoid partnerships with non-compliant institutions and to implement differentiated risk pricing [1][2]. - Banks must accurately understand the actual fees charged by credit enhancement service providers to ensure that the comprehensive financing costs for borrowers do not exceed the legal protection limit of 24% annual interest [2][3]. - The regulations will eliminate the "dual guarantee" model, which has allowed some platforms to inflate effective interest rates through additional fees [3][4]. Group 2: Market Reactions - Following the announcement of the new regulations, lending platforms are rapidly adjusting their business models, with many smaller institutions racing to comply before the transition period ends [1][8]. - Some banks are tightening their funding strategies and increasing scrutiny over the lending platforms they partner with, moving away from the previous "easy profit" model [5][6]. - The implementation of a whitelist for compliant lending institutions will raise the entry barriers for smaller platforms, leading to a potential industry consolidation [4][10]. Group 3: Industry Impact - The new regulations are expected to lead to a significant reshaping of the lending landscape, with smaller, non-compliant platforms likely to be phased out [10][11]. - Major players in the market, such as Ant Group and JD.com, are positioned to benefit from the regulatory changes due to their established compliance mechanisms, while smaller platforms may struggle to adapt [10][11]. - The shift towards self-operated channels by banks is anticipated as a strategy to regain control over compliance and reduce reliance on third-party platforms [11].