The Wave of Capital Increases in Consumer Finance, Who's Falling Behind

Source: Beijing Business Today

Author: Liu Sihong

In recent months, consumer finance companies have been actively increasing their capital. On March 19, according to incomplete statistics by Beijing Business Today, since the beginning of the year, many institutions such as Haier Consumer Finance, Hubei Consumer Finance, Jinmeixin Consumer Finance, and Beiyin Consumer Finance have completed capital increases or received regulatory approval, with registered capital generally rising significantly. However, in this capital race, some companies have fallen behind. As of now, Jinshang Consumer Finance, Mengshang Consumer Finance, and Shengyin Consumer Finance still have not reached the required registered capital of 1 billion yuan.

Industry insiders believe that over the past two years, strict regulatory policies, intense industry competition, and rising funding costs have turned capital increases from an optional choice into a mandatory task. Going forward, leading institutions will accelerate their capital expansion, and small- and medium-sized institutions will strive to meet compliance thresholds. The gap in capital will further reshape industry patterns and development models.

Continuous Capital Increases: Multiple Driving Factors Behind Them

In less than 100 days into the new year, consumer finance institutions have repeatedly announced capital increases, with the pace of capital supplementation accelerating.

Recently, Haier Consumer Finance received regulatory approval for a capital increase of over 1 billion yuan, becoming the fourth licensed consumer finance company to complete a capital increase since 2026, after Beiyin Consumer Finance, Hubei Consumer Finance, and Jinmeixin Consumer Finance. After this increase, Haier Consumer Finance’s registered capital rose from 2.09 billion yuan to approximately 3.118 billion yuan.

Following this capital increase, Haier Group remains the largest shareholder with a 49% stake. The company also introduced three new shareholders: Qingdao Guoxin Industry and Finance Holding (Group) Co., Ltd., Qingdao Lincong Trading Co., Ltd., and Shanghai Haitong Yunchuang, which together hold 16.81%, forming a diversified ownership structure.

Regarding shareholder backgrounds, Qingdao Guoxin Industry and Finance Holding (Group) Co., Ltd. is an important state-owned enterprise in Qingdao; Qingdao Lincong Trading Co., Ltd. is a wholly owned subsidiary of Qingdao Jinjialing Holding Group Co., Ltd., a state-owned platform in Laoshan District, Qingdao; Shanghai Haitong Yunchuang is a digital technology company, with its main shareholder being Juheba Technology.

The approval for Haier Consumer Finance’s capital increase reflects the strengthening of industry capital power. In the past two months, news of capital increases among consumer finance companies has been frequent.

For example, in February 2026, Jinmeixin Consumer Finance increased its registered capital from 500 million yuan to 1 billion yuan, with Gome Group exiting as a shareholder. After the increase and shareholding change, China Trust Commercial Bank and Xiamen Jinyuan Financial Holdings each hold 50% of Jinmeixin Consumer Finance.

In January 2026, Beiyin Consumer Finance’s registered capital increased from 850 million yuan to 1 billion yuan. After the increase, Beijing Bank holds 35.29%, while Santander Consumer Finance and Lishi Group hold 20% and 15%, respectively.

Additionally, Hubei Consumer Finance completed two rounds of capital increases in August 2025 and January 2026, raising its registered capital from 1.0058 billion yuan to 2.3089 billion yuan. After the increase, Hubei Bank and Hubei Small and Medium Enterprise Financial Service Center Co., Ltd. are the top two shareholders, holding 49.55% and 20.79%, respectively.

This wave of intensive capital increases is not accidental but driven by multiple core factors.

Zhi Peiyuan, executive chairman of the China National Trade Promotion Association, believes that the “Measures for the Administration of Consumer Finance Companies” requiring paid-in registered capital of no less than 10 billion yuan is a policy factor behind the recent surge in capital increases among small- and medium-sized institutions. Beiyin Consumer Finance and Jinmeixin Consumer Finance both reached the regulatory red line through this. Haier Consumer Finance’s additional 1.028 billion yuan not only meets regulatory requirements but also reflects an industry shift from “single capital supplementation” to “ecological synergy empowerment” by introducing state-owned and digital technology shareholders to optimize ownership structure.

At the same time, industry competition has become fierce, and funding costs continue to rise, forcing institutions to increase capital to enhance risk resistance and reduce financing costs.

As Yuan Shua, deputy director of the Investment Department at the China Urban Development Research Institute, pointed out, the rising cost of funds in recent years has squeezed profit margins for consumer finance institutions. Capital supplementation can optimize financial structure, reduce reliance on external financing, and ease funding pressure. In this process, industry development logic has shifted from “scale first” to “compliance first, quality prioritized.” Previously, some institutions relied on high leverage for rapid expansion, but this model is no longer sustainable. Capital adequacy has become a core indicator of whether an institution can operate stably. As a result, capital increases have shifted from optional strategic moves to essential survival tasks.

Some companies still lag behind, widening the capital gap and deepening competition

Despite the overall trend of capital increases, some consumer finance companies remain behind, with capital shortages potentially hindering their development.

Beijing Business Today’s investigation shows that among the 31 licensed consumer finance companies nationwide, Jinshang Consumer Finance, Mengshang Consumer Finance, and Shengyin Consumer Finance each have a registered capital of 500 million yuan, 500 million yuan, and 300 million yuan, respectively. All three have not yet reached the regulatory minimum of 1 billion yuan, and capital gaps still exist.

When asked about plans and progress for capital increases, the three companies did not respond by the time of this report.

Industry experts believe that whether a company meets capital requirements directly affects its operations, risk control, and market competitiveness.

“Adequate capital is the ‘ammunition’ for licensed consumer finance companies, directly linked to their operations and risk management, influencing business scale and technological expansion,” said Su Xiaorui, senior researcher at Su Xi Zhiyan.

From an operational perspective, increased capital means a higher lending limit and stronger risk resistance, with sufficient provisions to handle rising delinquencies. “According to regulatory rules, the leverage ratio for consumer finance companies can reach 6-10 times. With 1 billion yuan in capital, a company can mobilize 6-10 billion yuan in credit scale, and funding costs are also expected to decrease,” said Zhi Peiyuan. This disparity will accelerate the Matthew effect in the industry, with leading institutions leveraging their capital and scene advantages to dominate high-margin sectors, while non-compliant companies can only focus on lower-tier markets and face dual pressures of regulatory rectification and market squeeze.

In terms of market competitiveness, Yuan Shua further explained that companies with sufficient capital are more likely to access low-cost financing channels such as interbank borrowing and ABS issuance, and they enjoy advantages in scene cooperation, market trust, and regulatory ratings. Conversely, under-capitalized companies face cooperation restrictions, higher financing costs, and difficulties.

Matthew Effect: Small and Medium-sized Institutions Seek Differentiation

As capital supplementation becomes more common, the core competitive barrier in the consumer finance industry is shifting from simply size to more core capabilities.

“Relying solely on capital expansion is a thing of the past,” said several analysts interviewed by Beijing Business Today. They believe that after capital is replenished, the new competition will focus on scene deepening, refined operations, and risk control capabilities. Institutions should focus on building proprietary scenes, AI-based intelligent risk management, and user service upgrades to create core competitive advantages through differentiation.

A relevant person from Haier Consumer Finance stated that after the capital increase, shareholders will leverage their core advantages in industry resources, financial services, and digital technology to share resources and develop collaboratively. The company will use this capital increase as an opportunity to continue focusing on its main business and deepen the integration of finance and industry.

Yuan Shua pointed out that in the future, institutions with stable offline consumption scenes or online traffic portals will have advantages. Fintech capabilities will become key to improving risk control efficiency and user experience, such as using big data and AI for precise risk management and personalized recommendations, shortening loan approval times, and reducing bad debt rates.

Looking ahead, the industry’s final pattern will likely be “concentration at the top, deep cultivation in the middle, and exit of the tail.”

“For small and medium-sized consumer finance companies that have not yet met capital requirements, the best survival strategy is to quickly meet compliance through shareholder capital injections or attracting industry investors to avoid restrictions on business; secondly, they should focus on localized or niche scenarios, such as small consumer loans in county markets, leveraging regional resources to build differentiation; and thirdly, they can cooperate with platforms that have digital technology capabilities to provide financial services and operate with light assets,” Yuan Shua added.

Su Xiaorui also emphasized that facing the intensifying Matthew effect, small and medium-sized consumer finance companies should avoid direct confrontation with top-tier institutions, clarify their differentiation positioning, and deepen niche markets—such as focusing on home appliances, education, or county-specific scenarios—to offer more professional and tailored financial services for specialized customer groups.