Financing Cost And Availability On P2P Lending Market

P2P lending market network (peer to peer lending market) is relying on Internet technology, which is the new financial service model. People in the community can apply for personal loans through the network communication and collaboration. It is not through the traditional banking, trust, security companies and other financial intermediaries, lenders and borrowers directly apply loans through the network lending platform to complete unsecured lending transactions. The new financing model originated from western countries, which has been concerned in society and rapid development since 2005. After several years of development, Prosper US company and Zopa UK company with its convenient and efficient mode of operation, friendly interface, low rates, the difference of the financing rate has become a leader in the field of P2P lending market. In China, P2P lending model began to develop only in recent years, but with a rapid development. Appeared like PPDai, Qifang of P2P network online lending companies. They make use of innovative financial instruments and systems for low-income groups in the provision of sustainable financial services to help out in difficult economic times, lack of funding dilemma. P2P lending market emerged to fill the gaps in the traditional financial systems, they provide funds for the needs of individuals.Although P2P lending market developed rapidly, it faced two problems.The fist is low level of financing available. The second is high financing cost. This article aims at research the cause of the problems and way to solve the problems.This article will detail the background of P2P lending market in China and the experience of foreign countries. And then introduced the basic knowledge of P2P lending market, through theoretical and practical to prove its feasibility, combined them with the actual situation of our country to discuss the financing costs and loan market availability of financing on P2P network, market design and market regulation system in our country. After theoretical investigation of the traditional financing market and the P2P lending market, it revealed that asymmetric information is the cause of high financing cost and low level of financing available. However, "hard" information such as borrower credit history, income, or employment and "soft" information(social capital) can effectively relieve the two problems.This article has two innovations. The first is that this article is based on the empirical research while most of domestic scholars make research based only on the theoretical research. They have focused on the operational mode and development background, some have made comparison. The second is that this article has chosen information production which is the unique aspect of the P2P lending market as the research direction.