Core Viewpoint - The implementation of the new regulations on internet lending by the National Financial Regulatory Administration is causing a significant shift in the lending landscape, leading to a migration of funds within the industry as banks and consumer finance companies adjust their strategies to comply with the new rules [1][2][3]. Group 1: Regulatory Impact - The new regulations explicitly require banks to clarify the cost structure in their agreements with lending platforms, aiming to control the overall financing costs and prevent hidden fees [2][3]. - The regulations have created a tiered funding landscape, where platforms with over 60 billion yuan in scale can offer rates below 24%, while smaller platforms often resort to higher rates, leading to increased credit risk [2][3][4]. Group 2: Funding Migration - As banks tighten their funding, trust companies and commercial factoring firms are emerging as alternative funding sources for lending platforms, filling the gaps left by traditional banks [5][6]. - Trust funds, previously sidelined due to cost disadvantages, are becoming more active in the consumer finance market as they seek new growth opportunities amid reduced funding from smaller banks [6][7][8]. Group 3: Competitive Landscape - The competition among lending platforms has intensified, particularly for quality assets with rates below 24%, as larger platforms leverage their customer base and data advantages to dominate negotiations with funding sources [3][4]. - Smaller lending platforms are facing significant challenges in securing funding as they are increasingly excluded from the lists of approved partners by banks and consumer finance companies [4][10]. Group 4: Alternative Funding Channels - In addition to trust funds, commercial factoring and financing leasing companies are being considered as potential funding sources, although their capacity to fill the funding void is limited due to regulatory constraints [10][12]. - The regulatory environment is tightening around commercial factoring, with new guidelines expected to restrict their involvement in consumer lending, further complicating the funding landscape for smaller platforms [12][13].

Core Insights - The implementation of the new regulations on internet lending by the National Financial Regulatory Administration is set to take effect on October 1, 2025, which is expected to significantly impact the lending landscape [1][2] - A migration of funds within the lending industry is occurring as banks and consumer finance companies adjust their strategies in response to the new regulations, favoring compliant platforms [1][4] - The new regulations aim to control comprehensive financing costs, directly affecting high-interest lending products, particularly those with annualized rates above 24% [3][4] Funding Trends - The new regulations have led to a clear stratification in the funding landscape, with high-interest lending platforms facing rejection from banks and consumer finance institutions [3][4] - Platforms with a scale above 600 billion are generally able to maintain lower pricing, while those below this threshold are often forced to adopt higher pricing strategies, leading to increased risk [2][3] - The demand for funding from smaller lending platforms is rising, as they seek alternative funding sources such as trusts and commercial factoring to fill the gaps left by traditional banks [5][6] Trust Funds and Their Role - Trust funds, previously sidelined due to cost disadvantages, are becoming more active in the consumer finance market as lending institutions face tightening funding conditions [6][7] - The trust industry has a long-standing relationship with the lending sector, and recent regulatory changes have created opportunities for trust funds to re-enter the market [7][8] - Trust funds are primarily focusing on partnerships with leading lending platforms, avoiding high-risk assets with annualized costs above 24% [8][9] Commercial Factoring and Leasing - Commercial factoring companies and financing leasing firms are also being considered as alternative funding sources, although their capacity to fill the funding void is limited due to regulatory constraints [11][12] - The operational model of factoring in consumer finance involves transferring receivables from lending platforms, but the scale of funding achievable through this method is constrained [12][13] - Recent regulatory drafts indicate a move towards stricter oversight of factoring companies, particularly regarding their involvement in consumer lending [12][13]