According to Joe Zhang, who has spent time running a microcredit firm (and recently authored Inside China’s Shadow Banking: The Next Subprime Crisis?) the rapid growth of this kind of lender is “a result of financial repression, while it meets genuine and legitimate needs and wants”.
By giving the green light to private banks, regulators are coming to terms with this reality – that banks need to do more to attract customers back from the shadows of underground banking. Just like the plans to legalise Wenzhou’s underground lenders last year (see WiC145), the suggestion is that new rules which allow private banks to develop will help to encourage this.
Full article at WeekinChina website…
Joe Zhang is the Chairman of Slow Bull Capital based in Hong Kong, and also author of “Inside China’s Shadow Banking: The Next Subprime Crisis” and 避開股市的地雷。Zhang was Chairman of Wansui Micro Credit Company in Guangzhou, China, from 2011 to 2012, . He was named “Microcredit Person of the Year” in January 2012 by the Microcredit Association of China.
He started Slow Bull Capital in 2012. Before starting his own business, Zhang worked at investment banks. He was Deputy Head of China Investment Banking at UBS between 2008-11. From 1999 to 2006, Joe was co-head and head of China Research at UBS Securities Asia Limited. Prior to this, Mr. Zhang worked at the People’s Bank of China between 1986 and 1989. Zhang was chief operating officer of Shenzhen Investment (604 HK), a company listed on the Hong Kong Stock Exchange, between 2006-08.