Analyzing Shifts in Entrusted Lending Post-2018 in China

This thesis examines recent developments in China’s entrusted loans industry following the regulatory tightening in 2018. Entrusted loans are lending arrangements between two nonbank firms where funds are funneled through an intermediary bank. This arrangement is necessary for legal purposes as direct borrowing and lending between nonfinancial firms is not allowed in China. These loans can also circumvent bank interest rate ceilings and restrictions on lending to certain industries.