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China's 'naked loans' force female students to bare all in return for more cash

The Guardian The Guardian 15/06/2016 Stuart Leavenworth in Beijing

File photo © Getty File photo Shady internet lenders in China are reportedly coercing female college students to provide nude pictures of themselves as collateral – a loan-for-porn scheme that has prompted anger on the country’s internet.

Under the arrangement reported by state media this week, some college students have agreed to send photos of themselves naked, holding their identification cards, to potential lenders. In exchange, they became eligible for higher loan amounts – two to five times the normal sum, the state-run Beijing Youth Daily reported.

Some college students have agreed to send photos of themselves naked to potential lenders in return for cash. © Reuters Some college students have agreed to send photos of themselves naked to potential lenders in return for cash. Lenders tell the students they will publish the photos online if the loans are not repaid on time, often at usurious interest rates.

According to state media, the loan scheme is taking place on JD Capital’s Jiedaibao website. Jiedaibao is a platform where individuals - often friends and acquaintances – can lend or borrow money, striking their own arrangements.

Some of the site’s online lenders appear to prey on young people who have little financial experience. Beijing Youth Daily reported on the predicament of Lin Xiao, an alias for a student from Jiangsu Province. She told the newspaper she wanted to start a small business, so in February she agreed to nude photos to private lenders in exchange for 120,000 yuan (NZD$25,879).

Within four months, the debt she owed more than doubled. After being threatened by the lenders, she had to ask her family for money to avoid having her nude photos published online.

As of Wednesday, Chinese reports about the “naked loans” had generated thousands of comments on multiple Chinese websites, with many netizens condemning it.

“These kinds of loans are like opium,” wrote one commenter on Weibo, China’s main social media platform. “Why does the regulatory authority neglect it?”

Others had less sympathy for people who engage in online lending. “Are they deserving of sympathy? No, they aren’t,” one wrote. “You should spend the money you are able make. Why you spend the money that you have no ability to earn?”

JD Capital Co is a Beijing-based venture capital and private equity firm that was founded in 2007. In August of last year, the company reported that its Jiedaibao platform had received 2bn yuan (NZD$431m) in financing, “a record high in internet finance.”

Contacted by the Guardian on Wednesday, a spokesman for Jiedaibao condemned the “naked loans” and said the company would work with the police on any investigation of such practices. “This kind of naked loan is actually taking advantage of the online platform to operate an illegal usurious offline business,” they said.

That statements suggests a change in the company’s response. In its report, Beijing Youth Daily quoted an unnamed Jiedaibao representative as stating that the company had no control over any collateral demands made by a lender as part of “a private trade deal.”

Additional reporting by Christy Yao.


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