Core Viewpoint - The implementation of the new regulations in the lending industry, particularly the cap on annual interest rates at 24%, is leading to significant restructuring and challenges for various lending platforms, especially smaller ones [1][12]. Group 1: Regulatory Changes - The new regulation effective from October 1 mandates that annual interest rates must not exceed 24%, marking a significant shift in the lending landscape [1][2]. - Many lending platforms have begun to stop offering products with interest rates above 24%, indicating initial compliance with the new regulations [2][5]. - The industry is experiencing a shift towards compliance, with platforms adjusting their offerings to align with the new interest rate cap [2][6]. Group 2: Market Dynamics - The competition for quality clients with interest rates below 24% is intensifying, leading to increased customer acquisition costs for platforms [3][4]. - Smaller lending institutions are facing severe challenges, with some reporting a halving of transaction volumes due to the new regulations [3][12]. - The overall transaction volume in the industry is declining, with some institutions experiencing significant reductions in business activity [3][12]. Group 3: Asset Quality and Cost Pressures - Asset quality is under pressure as many platforms are forced to tighten their lending criteria and reduce exposure to higher-risk borrowers [5][12]. - The cost of acquiring customers is rising sharply, with some platforms reporting acquisition costs exceeding 1,000 yuan per user [3][12]. - The competition for low-interest clients is driving up operational costs, as larger platforms are spending heavily to attract these customers [5][12]. Group 4: Product Adjustments - Many platforms are unbundling previously tied "equity products" from the borrowing process in response to regulatory scrutiny [2][9]. - The industry is exploring new revenue models to compensate for the loss of high-interest products, including various value-added services [6][11]. - The compliance adjustments are leading to a clearer separation between financial and non-financial benefits offered to borrowers [8][10]. Group 5: Future Outlook - The lending industry is awaiting further regulatory guidance to clarify compliance requirements and operational adjustments [14]. - There is a growing expectation that more detailed self-regulatory policies will be introduced to support the industry in adapting to the new regulations [14].