A Chinese nonbank lender has revealed it is “severely insolvent” and faces a $30B liquidity shortfall because “internal management ran wild,” leading the government to mull steadying the ailing property sector to stop it from infecting the country’s financial system.

Asset and wealth management company Zhongzhi Enterprise Group said late last week that its liabilities were about $36B greater than its assets and that it was insolvent. The company said senior management leaving the company meant there were inadequate risk and liquidity management systems in place, The Financial Times reported.

The company sold financial products to wealthy Chinese individuals, with a big proportion of the capital raised funnelled into property lending. That market has been hit hard for the last two years as the volume of home sales dried up, the Guardian reported. Developers don’t have the cash on hand to finish developments, reducing confidence in the market from buyers and, in a vicious circle, leading sales to drop further.

Several huge developers have defaulted on their debt, and now the liquidity issues are spreading to lenders.

The Chinese government has so far held off intervening in the situation, hoping that although the market is seeing some distress, a solution could be found without state involvement.

But Bloomberg reported that the government is now weighing whether to introduce rules allowing banks to offer unsecured credit lines to developers to help them complete half-built projects, drafting a list of firms that would be eligible for this support.

Whether banks would choose to offer such credit lines is open to debate.

“The new round of measures to support the property sector would be powerful to break the vicious cycle of widespread defaults and avoid the spread of systemic risks,” Zhongtai Financial International Head of Equity Research May Zhao told Bloomberg.

“Developers can survive the downturn if the short-term liquidity issue is resolved,” said Jian Shi Cortesi, a fund manager at GAM Investment Management.