Study On The Formation Mechanism And Management Of Risks In Online Lending

Because the risks of online lending industry in China are outstanding,this paper explores the risk formation mechanism through the phnomenon,and studies how to manage the risk.Then some suggestions and measures are put forward to advance the orderly development of online lending industry in China.There are 6 chapters in this paper,in which the core chapters are the chapter 3-5,the chapter 1-2 are the introduction and the review of research,the chapter 6 conludes this paper.During the research on the risk formation mechanism of online lending,the paper firstly analyses the relationship among different risks in online lending.Sencondly,the principal-agent models based on the incentive theory are constructed to explore the failures of incentive and how the result assessment system leads to the fraud actions of platforms and borrowers in online lending.Finally,the real option model and numerical simulation are used to explore the potential factors of the platform's entry and exit decisions which lead to the risks of online lending.During the empirical analysis on the reasons that lead to the risks in online lending,two viewpoints(efficiency and success or failure of platforms)are taken to measure the risks.Then the study is carried out from three aspects:the first one is that content analysis and cluster analysis are adopted to explore the characteristics of the failed platforms based on the data of 2051 platforms in China.The second one is that the Logistic model is used to discuss the factors influencing the risks of platforms based on the normal and bankrupt platforms' mixed data.The third one is to measure the effiecency of normal platforms by the method of SBM-DEA and explore the factors which affect the efficiency of platforms.During the research in the management of risks in online lending,the paper firstly selects the venture capital as an example,explores the role of third party in the risk supervision,and puts forward suggestions on how to construct the third party supervision system.Sencondly,the mechanisms to prevent the actions of fraud and cllusion in online lending are designed based on the incentive theories.Finally,the suggestions are advanced through the comparison of regulation policies among France,British and China.On the basis of the above reseach,the main conclusions in this paper are following:the first one is whether government superivison or not,the result assessment in online lending is incentive to the fraud,collusion and work hard of platforms,which inceases the risks of online lending.Therefore,the mechanisms should be designed to motivate the platforms to improve their standard of risk-control and prevent the fraud and collusion.The second one is that the standard of risk control and managers' experiences in platforms may improve the survival of platforms and alleviate the risks of online lending on some degree.The third one is that the third party institutions such as venture capital may play a role in supervising and guiding the business of online lending.The last one is that external factors such as the government policy and market environment also have certain influence on the operation risks of online lending platforms.According to the the conclusions of theoretical and empirical research in this paper,the suggestions can be presented to control the risks in online lending as follows:the first one is the incentive mechanisms in online lending should be improved to prevent the risks of fraud and collusion.The second is that it is essential for platforms to enhance their core competence.The third is that the third party supervision system should be built and the market power should play an important role in supervising the operation of online lending platforms.The last one is that the financial property of online lending should be taken seriously and a moderate government supervision system should be built for keeping the normal order of online lending industry and protecting consumers.