Chen Haiyi, a deputy to the 13th National People's Congress (NPC), has called for courts and government bodies in China to take a more prudent attitude when putting young online borrowers on the credit blacklist for falling behind on loan payments.

Chen, also a judge at the Intermediate People's Court in Guangzhou, noted that the existing judicial system is not tolerant enough to young victims of online loan sharks. She also added that there is a lack of categorized law enforcement measures in regard to the amount of loans and the age of individuals in debt.

Due to their insufficient ability to repay and low risk awareness, young people can easily fall under tremendous pressure once they fall behind on loan repayments. Cases in recent years show that some victims of online loan sharks have ended up with serious mental health issues or even committing suicide.

Chen said that the existing policies on credit blacklisting are rather rigid, as some young people are brought to court by online lenders for being late on loan payments worth less than 10,000 yuan. Once put on the credit blacklist, their consumption activities are restricted, which can be a disaster for someone who is barely financially independent and with their whole life ahead.

It is estimated that in Guangzhou alone, tens of thousands of young people are placed on the credit blacklist and under consumption restrictions every year.

To remedy this, Chen suggested that courts and relevant government bodies take more prudent measures for those aged 35 or less and with less than 10,000 yuan of debt, so that young people's credit won't be affected due to one-off excessive online lending.

"If we put these young people on the credit blacklist all at once, they are likely to be marginalized for the rest of their lives," Chen warned.

Chen encouraged courts to make more conciliatory efforts between online lenders and their young users before cases go to trial. Statistics from the Guangzhou Court of the Internet show that it had mediated 297 such cases by the end of 2020, helping 312 young debtors get out of debt.

In addition, Chen urged online lenders to practice self-discipline and avoid false advertising about the loan interest rates, risks, and other requirements. While calling for more regulatory efforts, Chen also stressed the importance of information-sharing about individuals' lending history between finance institutes, fin-tech companies, and e-commerce platforms, so as to better evaluate the person's financial status before issuing loans. 

Chen further suggested establishing a caring mechanism to support young victims of online loan sharks to take lessons and explore job opportunities, in a bid to help them get rid of their debt.

Despite the applause Chen's suggestions received on social media platforms, some believe that the key issue here is to help China's younger generation develop a more reasonable and healthier attitude regarding consumption.

"While easing the punishment for young people on missing online loan payments, we need also to take stricter measures to crack down on illegal online loan sharks," one commenter said on Zhihu, a Quora-like Q&A platform in China.

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