About 50 executives from peer-to-peer (P2P) online lending platforms in Shanghai said they have "learned a lesson" and will "hold the bottom line" after visiting a prison in the city's Qingpu district.
Executives from P2P lenders, including Dianrong and PPDAI, visited Qingpu prison on Tuesday as part of a campaign against illegal fund-raising conducted by the Internet Association of Shanghai, caixin.com reported.
It is the first time that such "scared straight" campaigns have been applied to the Internet finance industry, according to caixin.com, adding that there is a lack of legal education in the sector.
The executives were shown how prisoners live and work behind bars and received a lecture from a convicted financial fraudster, named Lu Junchao, based on his own experience.
Lu, a former vice president of a sub-branch of the Industrial and Commercial Bank of China in the city's Minhang district, has been imprisoned for financial fraud since March.
"We were all impressed," Xu Jiayuan, a vice president of finance for PPDAI, told caixin.com. "He lost everything overnight and cannot even take care of his ill father now, reminding us to hold the bottom line when dealing with money."
The Internet finance industry in China has seen exponential growth in the last few years, particularly in P2P lending.
At the end of March, there were a total of 3,984 online P2P lending platforms in China and about half of them were classified as "problematic," with some closing down after failing to pay back lenders, according to data from independent online lending information provider wdzj.com.
But only 13 P2P platforms suspected of financial fraud have been taken to court since 2014, according to caixin.com.
