BEIJING – A Chinese police official says authorities have sentenced more than 1,400 people to prison terms of at least five years in a crackdown on underground lending.
The official, Du Jinfu, said Friday they were among a total of 4,170 people convicted of "illegal fundraising" since 2011. He said the rest received lesser penalties.
Informal lending by private individuals provides capital needed by many Chinese entrepreneurs. The government began to tighten controls after the slowdown in exports following the 2008 global crisis caused a rash of defaults and protests by lenders broke out. Regulators also worry state banks are lending outside official channels, raising risks to the financial system.
Du said people have been convicted of violations including advertising to attract lenders or promising excessively high rates of return.