Many platforms are looking survive by partnering with big financial institutions or transitioning to wealth-management products.
Several leading P2P providers did not respond to AFP requests for comment. Lufax has said it would scale back its P2P lending.
Zhang estimates less than 20 percent of platforms will successfully transform, with the remainder facing shutdown.
He expects the turmoil to push more borrowers towards credit products offered by big e-commerce companies like Alibaba-affiliated online-payments giant Ant Financial, which operates a huge money market and a range of other financial services.
The impact for many P2P customers will endure, however.
Tales of desperate, indebted borrowers abound on China’s internet.
A 22-year-old borrower from the eastern province of Shandong told AFP she considered suicide after racking up debts of around 200,000 yuan to pay her rent and indulge in shopping.
The shame sapped her “motivation to keep my life going,” said the woman, who spoke on condition of anonymity, fearful of being tracked down by loan collectors.
Chen Baihua, a 25-year-old from China’s eastern Zhejiang province, ran up debts of around 130,000 yuan, which he also was eventually able to repay with the help of his displeased parents.
The experience left him “traumatized”, and his resulting poor credit rating may rule out future home mortgages or car loans.
He now dedicates himself to running his family’s business selling electronic chips wholesale, hoping to rehabilitate his credit. But he is on a short leash.
“My parents said they would only help me out this one time. If it happens again, whether I live or die is not their concern,” Chen said.
“Easy money can easily eat you up.”