An Empirical Study On P2P Network Borrowing Behavior

As a new form of borrowing and lending, P2 P lending can effectively solve the financing problems of small and micro enterprises, but also provide a new investment channel for investors. In China, after PPDai platform was established in Shanghai in 2007, a great lot of P2 P platforms appeared. Until the end of 2014, there were 1575 P2 P platforms was operationg in China, and the whole loans reached 300 billion yuan. In the development, our P2 P industry presents three characteristics: very many participants, convenient and flexible transaction, and loans of high risk and high income. As the development of P2 P lending, the business models varied much, and many giant finance groups enterprises entered the industry, which added to the kinds of members of P2 P lending, and rencently the injection of great venture capital in the industry predicted the next prosper of P2 P lending.However, in the great progress of our P2 P lending, the chaos state also exists in the industry. Before the national regulatory documents published in 2015, there was a long time of disorder, resulting many unprofessional and cheater platforms blended in the intustry, and platform running phenomenon occured frequently, and many suspected f fraud and illegal platforms were exposed. For the normal operation of network lending platforms, the existence of information asymmetry in the industry caused by adverse selection and moral hazard problems generally exist, which requires platform in strengthening of the borrower’s credit qudit management at the same time, and more consider cooperation with security companies or small loan companies, in order to reduce the investment risk. This paper found that, although the network lending market in China continues to boom, but the borrowing success rate is very low(below 30%) and borrowing cost is very high(above 15%). In order to find out the reasons, this paper selects the trasactions datas in PPDai as the basis, constrcts two empirical models to explore the factors that affect the loan success rate and financing cost. The study found that the main factors include borrowers’ age and gender, borrowing and lending credit, success numbers and fail numbers of history borrowings, loan terms and interest rate. Specifically, borrowers are older and women, their success rates are higher. The borrowers’ credit is higher, and they can borrow the funds more easilly. The past successes and fails can affect the current borrowing rate positively and negatively. The loan term is longer, the borrowing rate is lower, and interest rate is higher, the borrowing rate is lower. As for loan cost, as our intuition, the borrowers’ bigger age, female gender, higher credit score, better past borrowing record and shorter loan term can lower the loan cost.After the qualitative analysis and quantitative analysis of P2 P lending in our country, this paper provides some suggestions to better develop our P2 P lending, our government should constantly perfect legal system contruction, strengthen the credit system contruction, and the platforms should make approciate user traning strategy based different characteristics of customers, improve credit scoring mechanism, and introduing the third party guarantee institutions.