Fitch Ratings: It is expected that some consumer finance companies in China will receive capital injections in the coming years

On April 10th, Fitch Ratings, the world's third-largest rating agency, announced that China's recent regulations on the management of consumer finance companies indicate that regulatory agencies aim to encourage major shareholders to increase their participation and support for consumer finance subsidiaries. Fitch expects that several consumer finance companies are expected to receive capital injections in the coming years, as the new regulations have raised the minimum registered capital of consumer finance companies from RMB 300 million to RMB 1 billion and introduced stricter leverage and liquidity requirements. Currently, about one-third of existing companies have registered capital lower than the minimum requirements of the new regulations. Strong capital strength should enhance the ability of consumer finance companies to absorb potential credit losses. Therefore, Fitch believes that regulatory requirements have a positive impact on the independent credit status of consumer finance companies.