(ECNS) -- Beijing has joined Shenzhen and Shanghai to become the latest city to stop home loans funded in the grey market, China National Radio reports.
The practice of real estate developers and agents providing down payment loans to home buyers increases risks to the property market and financial system, according to the People's Bank of China.
The industry association BJPTP said all peer-to-peer lending operations would clean up their funding for down payments and stop offering new services from April 19.
Grey market lenders are also urged to report information such as business volume and the number of investors to the association within five working days as further investigations may yet be launched.
Agencies that continue offering home down payments will be subject to possible punishment by supervision departments, it added.
More than 20 P2P lending platforms had called off business by Tuesday, Beijing Youth Daily reported.
But a real estate agent said people with a good credit record at banks could still apply for loans from small lending agencies or banks under the name of consumer lending to facilitate house purchases.
