Research On The Risk Guarantee System Of P2P Loan Investors

Nowadays, internet technology has been used in every aspect of the normal life, and its combination with the traditional lending has produced P2P lending. P2P lending is a loan of the borrowers and the lenders through the Internet platform to achieve the financial intermediation process, which is convenient for both sides in the flow of funds and also promote the flow of resources. But with the rapid development of the industry, the risks faced by the investor is increasing as well. For this reason, China’s net loan industry has established a risks protection system for the investors, which includes risk reserve fund system and the third party guarantee system. Although these two systems play a important role in protecting investors, they also have their own risks and legal problems. This paper will focus on these two systems and discuss the legal issues involved, and finally make recommendations to improve the investors risks protection system of P2P lending industry in China.The main content of this paper is divided into five parts:The first part is an overview of the P2P lending industry in China. This part is divided into two sections. The first section is the introduction of basics of P2P lending, including the concept of P2P lending, the process of the net loan and the characteristic of the industry. The second section is the analyzing of the investors risks in P2P lending, and illustrates three risks faced by the investors.The second part is the introduction of the risks protection system. This part is divided into three sections. The first section is the description of the reserve fund system, including basics of this system and operating rules of it. The second section is an introduction of the third party guarantee system, including its subject, object and the mode. The third section is the analysis of the risks in the reserve fund system and the third party guarantee system.The third part is the analysis of the legal issues in risks protection system. This part is divided into two sections. The first section is to discuss the nature and attribution of the risk reserve fund system, and draws a conclusion that the risk reserve fund does not belong to the platform and it is not a guarantee platforms offer. The second section discusses the qualification of non-financing guarantee companies and micro-credit companies. Finally, I draw a conclusion that non-financing guarantee companies and the micro-credit companies which lacking special authorized do not have the qualification to provided guarantee services in P2P lending.The fourth part is the suggestions for the investors’risks protection system in P2P lending. This part is divided into three parts. The first part is the suggestions to the reserve fund system, including insuring its legal status, clearing its management and establishing its information disclosure system. The second section is for the third party guarantee system, including clearing its subjects, establishing its credit rating system and information disclosure system. In the third section, I suggest investors to build mutual insurance system, and analysis the details of the system.The fifth part is the conclusion of this paper and a vision of the P2P lending industry’s future.