DIANRONG, one of China’s biggest peer-to-peer (P2P) lenders which is laying off staff and shutting stores, blamed the absence of clear-cut policies for its troubles.

“While the industry has expanded to a large and complex scale over the years, regulatory directions keep changing and different regions have different rules,” co-founder Guo Yuhang said in an internal memo.

Dianrong was shutting down 60 of its 90 offline stores and laying off an estimated 2,000 employees, media reports said earlier this month.

The Shanghai-based company was co-founded by Soul Htite, who was also behind U.S. online lender LendingClub Corp., and is backed by Singapore sovereign fund GIC Pte Ltd. and Standard Chartered Private Equity.

China’s multi-year crackdown on risky lending practices and excessive leverage have caused a wave of P2P collapses.

The industry could face a fresh wave of regulatory scrutiny after several fintech companies were slammed by CCTV during the country’s annual consumer rights day TV show Friday.

Dianrong, which expanded rapidly in 2017-2018 in a loose regulatory environment, had to cut back in the second half of last year, Guo said in the memo.

He added that many highly promising businesses Dianrong developed as part of its aggressive expansion have turned into “heavy burdens with unbearable high costs” for the firm as regulations unexpectedly tightened.

The company’s outstanding transaction volume has shrunk to 10 billion yuan (US$1.49 billion) from its peak of 14 billion yuan, Guo said. (SD-Agencies)