Chinese garments firm scraps micro lending plan amid crackdown

Zhejiang Busen Garments Co, one of the largest men's brand wear companies in China, said on Wednesday it has dropped a plan to set up a micro loan company following the latest policy move to tighten supervision of the sector.

Busen is the first listed company to terminate such a plan after Beijing took a firm step on Tuesday to suspend regulatory approval for the setting up of new internet micro lenders in a bid to curb financial risks in the rapidly growing industry.

The central government also told local regulators to halt granting of new approvals for micro loan firms to conduct loan business across regions.

In a filing to the Shenzhen stock exchange, Busen said the decision was based on the latest government move and potential pressure on capital.

The termination would not have material influence on the company's operation and business development, it added.