Chapter 4

The April 2025 rules and how hard they bind

The April 2025 loan-facilitation notice is the event the market pinned the de-rating on, so it is worth separating what it actually changes from what it merely names. Its headline provision — an effective 24% cap on a borrower's comprehensive financing cost — is a threshold Qifu already crossed years ago: it repriced its entire book below 24% by early 2022 and ran a 20.9% average APR in the third quarter of 2025. The rules bind through a different channel — access to bank funding via a new "whitelist," and the liquidity squeeze that arrived with them — and that channel is visibly biting.

A pricing cap Qifu already cleared

When 360 Finance — Qifu's former name — filed to list in 2018, its loans ranged from 9% to 36% APR, and most of the book sat above what would become the binding line: 43.4% of loans by outstanding balance were priced above 24% at the end of 2017, rising to 67.4% by September 2018 [1].

Source: 2017–2018 shares of outstanding balance above 24% per the 2018 Form F-1 [2]; the 2022+ figure reflects management's statement that all new loans were priced below 24% by Q1 2022 [3].

The transition ran from 2021 to early 2022. Average portfolio pricing was 27.2% in the second quarter of 2021, and management's stress test assumed a steep cut to below 24% from September 2021, concluding it "should still be able to maintain healthy growth and profitability in the transitional year of 2022" [4]. By the first quarter of 2022 it reported that "all new cap heavy and cap light loans are already priced below 24%" and was "very confident to achieve the rate cap requirement ahead of the regulatory deadline" [5]. By the third quarter of 2025 — six months after the new notice — Qifu's average APR was 20.9%, with room beneath the cap [6].

That history matters for reading the 24% provision. The relevant caveat is definitional: the notice specifies a comprehensive financing cost — the all-in rate a borrower pays, including guarantee and credit-enhancement fees, not the funding-partner interest alone [7]. Qifu already presents its price to the borrower as a single APR inclusive of those fees, and at 20.9% that all-in number sits inside the cap. The pricing dimension of the April 2025 rules is, for Qifu, largely a formalization of a shift it completed three years ago.

What the notice actually changes

The National Financial Regulatory Administration's April 2025 notice, effective October 1, 2025, has three operative parts as Qifu itself summarizes them: a "whitelist" management system requiring commercial banks to run comprehensive due diligence and continuous evaluation of their facilitation partners; the 24% comprehensive-cost requirement above; and a mandate that banks terminate cooperation with agencies that fail compliance standards or use improper collection practices [8].

The first prong is the load-bearing one. A whitelist converts bank partnership from a commercial decision into a compliance gate: "if we fail to be included or maintained on the whitelist of our partnering commercial banks … our financial institution partner may cease their cooperation with us" [9]. Qifu's funding is concentrated enough for that to matter: its top five direct financial-institution partners supplied about 35.1% of total funding for the loans it originated and facilitated in 2025 [10]. The company frames the whitelist itself as a risk, warning that failing to stay on partners' lists would leave "our access to funding from these financial institutions … significantly curtailed" [11].

Sources: average APR and funding mix, Q3 2025 earnings call [12]; top-five funding share, FY2025 20-F [13]; institutions served, Q4 2025 earnings call [14].

The bind runs through funding, not price

The clearest evidence of where the rules bite is the collapse of Qifu's referral channel. Its Intelligent Credit Engine — the capital-light service that hands qualified borrowers to third-party lenders for a pure fee — saw referral service fees fall about 85% quarter-on-quarter in the fourth quarter of 2025, and ICE volume drop 41% quarter-on-quarter to roughly 20% of total loan volume [15]. Management attributes it directly to the rules: "as the entire industry is lifting the risk bar, funding capacity for our ICE and referral businesses will come down. This means some users will no longer be served, and this will have some impact on our loan volume" [16]. This is the mechanism behind the balance-sheet intensification traced in Unit Economics: as the fee-light referral spigot narrowed, volume migrated onto Qifu's own book.

The rules also arrived alongside a broader liquidity squeeze. Management describes 2025 as a "systemic restructuring" of China's consumer-finance industry — new facilitation rules, window guidance for consumer-finance companies, and comprehensive-cost guidelines for micro-lenders together "tightened market liquidity, which in turn suppressed credit demand and put unprecedented pressure on both loan growth and risk management across the industry" [17]. Separating the two is hard, but the demand-and-liquidity channel — not a fresh repricing — is what management says drove the fourth-quarter pressure.

One constraint is worth sizing precisely because it is smaller than it looks. Informal window guidance on consumer-finance-company pricing has circulated, but those companies supply only about 15% of Qifu's funding mix; most of its funding comes from banks, leaving it "flexible to shift our funding structure if needed" [18]. The direct pricing exposure is contained; the funding-access and demand exposure is not.

An industry rule, and who it favors

This is a sector-wide reset, not a Qifu-specific action. Peers describe the identical notice: Yiren Digital details the same whitelist, comprehensive-cost, and fee-transparency requirements [19], and Xiaoyu/X Financial notes that "in practice a 24% annual cap on total borrowing costs is generally implemented and enforced" across the industry [20]. Because the constraint is common, its competitive effect is relative, and management's read is that it favors scale: "smaller players without such advantage will gradually exit the market, allowing the stronger ones to capture a larger share" — Qifu counts itself among the stronger, calling the rules "a positive for the industry" [21]. It served 167 financial institutions cumulatively at end-2025 [22], a partner base wide enough that a single whitelist exclusion is unlikely to be existential — though the 35.1% top-five concentration means several would sting.

The table below sorts the notice by channel and by how hard each binds on Qifu specifically.

Sources: comprehensive-cap and whitelist provisions, FY2025 20-F [23] [24]; pricing and ICE data, Q3–Q4 2025 calls [25] [26].

The judgment, and what would change it

On the evidence, the April 2025 notice is better read as an accelerant of an industry consolidation than as a fresh cap that impaired Qifu's pricing. The pricing shock the market appears to have feared was absorbed in 2021–2022; what the rules do now is squeeze funding access and near-term demand, which shows up as lost ICE volume and a book pulled onto Qifu's own balance sheet rather than as a repricing of the whole loan portfolio. On the same facts, management's "positive for the industry" framing is the more self-serving read: the near-term cost is real and quantified — a 41% quarter-on-quarter fall in ICE volume is not a rounding error — and the long-run benefit of consolidation is an assertion, not yet a number.

Two things would change this read. The first is confirmation of whitelist status: Qifu has not disclosed inclusion on its partners' lists, and a material exclusion would move the funding-access bind from medium to high. The second is the still-forming rulebook. The disclosure regime keeps tightening — the March 2026 Provisions on explicit disclosure of comprehensive financing cost take effect in August 2026 [27], and Qifu flags an April 2026 measure on online marketing of financial products effective September 30, 2026 [28]. A formal — rather than informal — pricing rule for consumer-finance funding partners would be the item that reopens the pricing question this chapter otherwise sets aside.