The FTCR China Underground Lending Index dropped in November as lenders reported slower volume growth. The headline index of 62.9 was 6.5 points lower than last month but 0.6 points higher year on year.

Real estate was again cited as the greatest source of credit risk, followed by the manufacturing sector. Manufacturing replaced the consumer sector as the biggest source of credit demand in November.

  • The FTCR China Lending Volume Index fell 12.4 points to 64.1, above the average 62.1 for the previous 12 months.
  • Our Lending Rate Index suggested interest rates rose at a slightly faster pace than in October.
  • The index rose 0.6 points to 57.8, a 3.8 point gain year on year. Among respondents, 66.7 per cent said rates remained the same.
  • Our Interest Rate Outlook Index rose 7.1 points to 54.5 in November, the highest level for two years. Among respondents, a record 90.9 per cent expected rates to stay the same, while no respondents expected rates to fall.
  • Our index measuring bad debt levels among underground lenders suggested these fell at a slightly faster pace than they did in October.
  • The FTCR China Bad Debt Index fell 0.3 points to 38.1.
  • The manufacturing sector replaced consumers as the biggest source of credit demand in November, cited by 58.7 per cent of respondents. Real estate came next with 47.8 per cent, followed by small business (43.5 per cent) and consumers (39.1 per cent).
  • The real estate sector was again cited as the greatest source of credit risk, by 41.3 per cent of respondents, followed by manufacturing (37 per cent), small business (34.8 per cent) and consumers (32.6 per cent).

The FTCR China Underground Lending survey is based on interviews with more than 60 underground bankers. For further details click here. This report contains the headline figures from the latest Underground Lending survey; the full results are available from our Database.

FT Confidential Research is an independent research service from the Financial Times, providing in-depth analysis of and statistical insight into China and Southeast Asia. Our team of researchers in these key markets combine findings from our proprietary surveys with on-the-ground research to provide predictive analysis for investors.