China launches first P2G lending platform  

全国首家“P2G”上线：“跑不脱的借款人”有待市场检查

Chengdu (ECNS) -- The nation's first P2G (private to government) online lending platform was launched in Sichuan province on Thursday, boasting fewer risks with loans backed by the government.

"It's essentially P2P (peer-to-peer) lending, but the money goes to funding government projects," said Tang Wei, chief executive of Sichuan Financial Investment Promotion. He added that with the government as borrower, default risks will be minimized as the state usually holds higher credit than private borrowers.

China's P2P lending entered a boom period in the second half of 2013. By Q3 2013, China had 1,438 platforms handling a total of 157.6 billion yuan ($25.6 billion).

However, high risks associated with bad debt and defaults caused great concern among investors. In October 2014, 38 such platforms collapsed.

Tang said it's definitely the right time to come up with a lending platform that investors can trust.

"There's a slight chance that government can also default on its loans, but a debt repudiation is unlikely to happen," Tang explained, adding that the platform would make sure the money goes to where it should be.