Core Viewpoint - The article discusses the significant reduction in the number of small loan companies in China due to regulatory measures aimed at cleaning up the industry, with a focus on the impact of the new supervision regulations introduced in January 2025 [3][4][5]. Summary by Sections Industry Overview - As of June 2025, there are 4,974 small loan companies in China, with a total loan balance of 736.1 billion yuan, which decreased by 18.7 billion yuan in the first half of the year [3]. - The number of small loan companies has decreased by 283 in the first half of 2025, surpassing the total reduction of 243 in 2024 [5]. Regulatory Actions - The introduction of the "Interim Measures for the Supervision and Administration of Small Loan Companies" has led to a concentrated cleanup of non-compliant small loan companies across various provinces [3][4]. - Specific actions include the identification and proposed cancellation of licenses for 19 companies in Chongqing deemed "lost" or "shell" companies, as well as similar actions in Hunan and Yunnan provinces [4][5]. Historical Context - The number of small loan companies surged from 2,614 in 2010 to 8,910 in 2015, with loan balances increasing from 197.5 billion yuan to 941.2 billion yuan during the same period [7]. - However, from the second quarter of 2015 to the second quarter of 2025, the number of small loan companies decreased by 3,977, a decline of 44.4%, and the loan balance dropped by 223.3 billion yuan, a decrease of 23.3% [8]. Future Outlook - Industry experts predict that the number of small loan companies may continue to shrink by about 20%, stabilizing around 4,000 companies to ensure effective service in inclusive finance while promoting high-quality industry development [9].