The Rising Trend of Online Lending and Its Negative Impact on Young Consumers

Despite the suffocating summer heat, Ruoyi* breaks out in a cold sweat. She glances dully at her vibrating cell phone: another unknown call, the twenty-third of the day! This is undoubtedly a new request for recovery, accompanied by threats. She can receive up to hundreds per day.

Unlike the older generation, who sought to save for their old days, young people do not hesitate to “satisfy their dreams of today with the money of tomorrow”, a real way of life. Many online lending platforms have emerged in response to this new trend.

Consumerist spiral

As their offers are much more accessible and allow larger amounts to be obtained than traditional lending channels such as banks, they make life easier for fans of consumption on credit, but also plunge many young people into over-indebtedness.

“This restaurant looks great. You need this dress!” When she had barely entered university, to be in the spirit of the times and lead a “brilliant” life, Ruoyi found herself forced to ask for more and more money from her parents who were not happy. yet not on gold.

But how could that be enough for her, knowing that she was capable of spending all her monthly pocket money (1,000 yuan [124 euros]) in one day, simply by going to eat at a Japanese restaurant with friends and buying a new dress?

Sucked into a consumerist spiral, Ruoyi became interested in offers from online lenders, and took advantage of consumer credit from Ant Credit Pay, Baitiao and 360 Jietiao.

“It is very nice to be treated as a person with significant purchasing power.”

She fell into the trap of online lenders, finding herself forced to take out loans to repay others. But aren’t these expenses which weigh on the future of young people a way of exposing their youth? In fact, some are now drowning in debt, which constitutes an unbearable burden for them.

Debts impossible to repay

Like Ruoyi, Jia*, a young man from Henan [centre de la Chine], was also caught up in the online lending cycle. Although he has just passed the threshold of thirty, he already looks like an old man with his white hair and his thin, gaunt figure.

Six years ago, he contacted online lenders on the advice of friends. He thus borrowed money on seven or eight platforms, for a total amount of more than 2.6 million yuan (321,000 euros). For him who, with parents and a dependent child, is already struggling to provide for his entire family, repaying his debts is mission impossible.

He sighs, takes a cigarette out of his pocket, lights it and takes a deep drag before telling us, shaking his head, looking helpless: “Everyone knows online lending is risky.” Then he adds:

“At the time, I was young and full of energy, I was convinced that I could easily repay my loans by doing odd jobs on top of that.”

In 2017, Jia left his rural hometown to work in Beijing, where he earned 5,000 yuan a month. But as the cost of living in the capital was quite high, and he was not aware of the need to save, he always spent his entire salary, barely receiving it.

Around that time, a former college classmate asked him to lend him money. Since Jia didn’t want to show him that he was very fair financially, he took out a loan from an online lender to be able to lend to his friend, thinking that it was nothing serious.

Via