It's not "passing the buck," but rather strict risk control? China Post Consumer Finance handles risk professionally to resolve issues.

Ask AI: How does Zhongyou Consumer Finance’s bad debt disposal reflect the industry’s trend of risk control upgrades?

Produced by | Zhongfang Network

Reviewed by | Li Xiaoyan

As an important member of licensed consumer finance institutions, Zhongyou Consumer Finance has recently listed personal bad loans for transfer at the Credit Registration Center, drawing market attention to its risk management and operational quality. In a critical phase where the consumer finance industry is shifting from scale expansion to high-quality development, the clearance of bad assets, complaint resolution, and compliance upgrades are not only common issues in the industry but also regular actions taken by licensed institutions to actively fulfill responsibilities and optimize asset quality. Zhongyou Consumer Finance demonstrates a mature pathway for licensed consumer finance companies to cope with cyclical fluctuations and uphold the original intent of inclusive finance by disposing of bad debts in a market-oriented manner, rectifying complaints through institutional means, and strengthening risk control with technological capabilities.

Recently, Zhongyou Consumer Finance announced the transfer of its first batch of personal bad loans for 2026, intending to transfer a total outstanding principal and interest amount of 919 million yuan, completed through public bidding at the Credit Registration Center. This operation is not an isolated case but a standard action in the consumer finance industry under regulatory frameworks to properly dispose of bad debts and prevent risk accumulation. Since 2025, Zhongyou Consumer Finance has repeatedly conducted the transfer of bad assets through the Credit Registration Center, strictly adhering to regulatory requirements and adopting online public bidding and fully disclosed information to ensure transparency and compliance in the disposal process.

From an industry practice perspective, the bulk transfer of personal bad loans is a market-oriented disposal channel encouraged by regulators, helping licensed institutions accelerate risk clearance and optimize their asset-liability structure. The detailed disclosure of information such as the weighted average overdue days and borrower structure for the bad assets being transferred by Zhongyou Consumer Finance complies with the business standards of the Credit Registration Center. Industry experts point out that entrusting bad assets to licensed asset management companies for professional disposal can enhance recovery efficiency and avoid long-term occupation of management resources by institutions, aligning with the industry division of labor logic that “professionals handle professional tasks.”

It is commendable that Zhongyou Consumer Finance consistently prioritizes asset quality. By the end of 2024, the company’s total assets reached 67.229 billion yuan, maintaining a steady growth trend; operating income has steadily increased for several consecutive years, achieving 7.541 billion yuan in operating income in 2024, with solid business fundamentals. In the context of mounting credit risk pressures in the industry, the proactive clearance of bad debts and timely impairment provisioning reflects the company’s prudent operational philosophy and provides space for subsequent healthy business development.

At the same time, the company strictly adheres to the requirements of the “Administrative Measures for Consumer Finance Companies,” establishing a comprehensive risk classification and impairment provision system to ensure sufficient risk compensation capability. After the transfer of bad assets, the company’s asset structure is further optimized, enhancing liquidity and capital utilization efficiency, providing a more solid financial support for serving the real economy and supporting resident consumption.

The market has noted that Zhongyou Consumer Finance and its subsidiary Zhongyou Wallet have received some consumer feedback on complaint platforms, involving issues such as interest rate inquiries, collection services, and post-loan communication. In response, the company does not evade or cover up these issues, placing consumer rights protection as a baseline for operations, systematically enhancing service and compliance levels through institutional rectification, process optimization, and technological empowerment.

In terms of interest rate and fee management, Zhongyou Consumer Finance strictly implements regulatory pricing requirements, with annualized loan interest rates compliant with the regulatory upper limit for licensed consumer finance institutions. All fee rates and repayment plans are fully disclosed during the loan process to protect consumer rights to information and choice. For individual users questioning the method of interest rate calculation, the company has established a dedicated customer service channel to provide IRR calculation explanations and repayment detail inquiries, proactively addressing information asymmetries.

In collection management, the company fully implements regulatory prohibitions, strictly forbidding violent collection, harassment, and illegal outbound calls. Through measures such as information desensitization, standardized scripts, controlling outbound calling times, and linking performance to compliance, collection behaviors are standardized from the source. At the same time, the company is increasing technological investment, launching an intelligent collection system and compliance monitoring tools to monitor the entire collection process in real-time, promptly blocking violations, and effectively protecting the legal rights of borrowers and related personnel.

Addressing issues pointed out in past regulatory inspections, Zhongyou Consumer Finance promptly completed rectifications, enhancing the management of partner institutions, strengthening monitoring of post-loan fund usage, and optimizing information disclosure processes. The company embeds compliance management throughout its entire business process, establishing a compliance system of “board oversight, executive responsibility, departmental collaboration, and full staff execution,” promoting the internalization of compliance concepts and externalization in actions through the construction of a “sunshine credit” culture and warning education.

Additionally, the company has established a diversified dispute resolution mechanism, opening a fast complaint handling channel, with average response times and resolution rates continuously improving. Consumer protection work is integrated into performance assessments, creating a closed-loop management system of “prevention, control during the process, and accountability afterward” to reduce complaints and enhance satisfaction.

Given the characteristics of consumer finance, which involve small, dispersed loans and a broad customer base, Zhongyou Consumer Finance insists on using technology to drive upgrades in risk control, constructing an intelligent risk control system that spans pre-loan, mid-loan, and post-loan stages to reduce the generation of bad debts from the source, achieving a balance between scale and quality development.

The company has built a four-in-one defense system comprising “visual anti-fraud + graph anti-fraud + multimodal anti-fraud + risk rule anti-fraud,” relying on big data and artificial intelligence technology to accurately identify risks such as group fraud, false credit, and illegal misappropriation. This system intercepts over one million risky transactions annually, effectively safeguarding asset security. In the pre-loan phase, repayment ability assessments are enhanced, with strict adherence to credit limit ceilings; real-time monitoring of fund flows during the loan process provides timely alerts for abnormal behaviors; and post-loan, a tiered management approach is implemented using intelligent models to improve the accuracy of risk disposal.

In terms of digital operations, the Zhongyou Wallet APP continues to optimize user experience, launching an intelligent customer service feature “You Xiaobao,” achieving an intent recognition accuracy rate of 98% and providing 24/7 online service to reduce communication errors. At the same time, it strengthens information security protections, improving data desensitization and privacy protection mechanisms to maintain the safety of user information.

Leveraging postal system resources and digital capabilities, Zhongyou Consumer Finance adheres to its inclusive positioning, focusing on daily resident consumption, home appliances and renovations, and education and training scenarios to provide small, convenient, and compliant consumer credit services, aiding in expanding domestic demand and boosting consumption. In its business expansion, the company consistently upholds the principle of “small and dispersed” to mitigate concentration risks and maintain the robustness of its asset portfolio.

Objectively speaking, Zhongyou Consumer Finance faces phase-specific challenges such as managing asset-liability ratios, reducing complaints, and refining risk control during its rapid development; these are common issues as the consumer finance industry transitions from high-speed growth to high-quality development. In 2024, the company experienced temporary fluctuations in net profit, primarily due to rising industry credit costs, increased provisions for bad debt disposal, and heightened compliance investments, which are normal expressions during cyclical adjustments.

From a long-term perspective, the company’s strong shareholder background, solid business foundation, and comprehensive compliance system equip it with the ability to sustain steady operations. Currently, the company is transitioning from “scale-driven” to “quality-driven,” gradually restoring profitability through optimizing asset structures, reducing bad debt generation, improving pricing accuracy, and lowering operating costs.

In the context of increasingly clear regulatory guidance, the core competitiveness of licensed consumer finance institutions has shifted from scale expansion to a comprehensive comparison of compliance capabilities, risk control abilities, service capabilities, and technological capabilities. Zhongyou Consumer Finance’s proactive bad debt disposal, strict compliance operations, reinforced consumer protection responsibilities, and increased technological investments are the correct choices that align with industry trends and embrace regulatory requirements.

The clearance of bad debts is not about “getting rid of burdens,” but rather responsible risk management; complaint rectification is not a passive response, but an opportunity for proactive enhancement. As a licensed consumer finance company, Zhongyou Consumer Finance directly faces challenges in its development and proceeds steadily in compliance, using market-oriented methods to manage risks, institutional construction to protect consumer rights, and technological capabilities to support stable operations.

In the future, as the regulatory system for the consumer finance industry becomes more refined, risk control technologies mature, and service capabilities advance, Zhongyou Consumer Finance is expected to further optimize asset quality, enhance operational efficiency, and strengthen inclusive value, achieving a virtuous cycle of high-quality development and controllable risks in the process of serving resident consumption and supporting the real economy.