The future development trend of China's financial industry

The Influence of Epidemics on Consumer Finance

The impact of the epidemic on consumer finance companies is directly reflected in three aspects: scale, risk and profit. First, customers' willingness and ability to consume have been hit hard, and the short-term consumption demand of customers has declined, which will inevitably affect the scale of credit.

Second, the decline of customers' income sources and voluntary repayment ability will lead to increased risk exposure of financial institutions, increased difficulty in asset management and control, and further increased pressure on asset quality. Third, in order to resist the risk of bad debts, financial institutions actively increase their provisions, which will affect the increase of profits.

Judging from the operation of representative consumer finance enterprises in the first half of 2020, most of them were seriously affected by the epidemic, among which the net profit of consumer finance enterprises such as Hubei, Shanghai, Zhaolian, Yin Bei, Shang Cheng and Jincheng in the first half of the year dropped sharply compared with the same period of 20 19, and the risk of non-performing assets increased under the epidemic, which led to a decline in the net profit of enterprises.

In order to cope with the impact of the epidemic on the consumer finance industry, enterprises represented by Zhongyuan Consumer Company switched to a new core system based on TCE platform to increase the risk control ability of the company's consumer finance business. In the second half of 2020, with the relief of the epidemic, economic recovery and industry transformation, the profitability of consumer finance companies is expected to pick up in the second half of the year.

-For more data, please refer to the Analysis Report on Market Foresight and Investment Strategic Planning of Consumer Finance Industry in China issued by Foresight Industry Research Institute.