Qi Dong, an office worker in Beijing, has invested more than 120,000 yuan across three leading P2P platforms, helping individual borrowers in need of money for small projects such as house renovation, stock replenishment or a car purchase.

While individuals would usually have trouble getting financing from banks for such projects, Qi can provide them with the money they need and earn a slightly higher 10 percent interest rate on the loan, compared with the 6 percent basic interest rate set by banks.

By the end of 2013, PPDAI had 2 million registered clients with an accumulated trade volume of 1.6 billion yuan. With no industry standard or regulations, the P2P industry has experienced solid growth.

By the end of June, there were 1,263 such P2P platforms generating a turnover of about 100 billion yuan in the first half of this year, according to the Internet Society of China.

But the lack of regulation also brings risk to investors, says Li Chao, an analyst with iResearch, an Internet consulting firm.

According to Wang Yanxiu, an official with the China Banking Regulatory Commission, by July 31, 150 P2P firms had been recorded to have pooled investors' money and fled.

At present, information about the P2P and crowdfunding firms has not been included in the central bank's credit reporting system, which provides room for fraud.

Yi Huanhuan, deputy head of the Beijing-based Hongyuan Securities' research arm, called for the government to be explicit on supervision principles over Internet financing, exerting restrictions on areas including registered capital, lending leverage, reserve ratio and single loan limits.

"It's better to divert rather than to block. It's just like you never know if a chicken or a dinosaur will come out of an eggshell," said Yi.

But regardless of outcome, a cage should not be put on the eggshell in advance, he said.

Self-discipline and risk control are key to the long-term survival of Internet financing companies, said Liu Yanfeng, CEO of Anxindeli, a new P2P platform that was launched on July 31.

"Never set up your own capital pool with investors' money or involve in money laundering," said Liu.

Start-up eyes online funding	Online banking on the rise