Research On Group Lending Of SMEs In Online P2P Lending Platforms

Online peer-to-peer lending (P2P) is a new type of social platform that enablesindividuals borrow and lend money directly from one to another. In this kind oflending model the mediation of financial institutions is not required, based on Internetapplication. It can satisfy the need of microfinance, and has had a very fastdevelopment as a trend of microfinance. Online P2P lending has distinct advantagesin respect of small and medium-sized enterprise financing, owing to characteristics oflow lending cost, network, a wide range of lenders, a higher transparency than theexisting folk loan. To a certain extent, it can help alleviate the difficult situation ofsmall and medium enterprises financing. Therefore, this paper researches online P2Plending of small and medium-sized enterprise, combining online P2P lendingproblems, and introduces traditional group lending into online P2P lending platformthat succeeds to reduce information asymmetry in credit, so as to provide certaintheoretical reference on innovation practice of online P2P lending of small andmedium-sized enterprises.This paper firstly analyzes present situation of online P2P lending, operationaland technical problems, as well as current status of bank group lending. Then thepaper reviews related theories about this research, and summarizes references ofonline P2P lending. Based on these theoretical underpinnings, this paper innovatesand designs new financing forms for small and medium-sized enterprises financing inlight of the characteristics of online P2P lending and group lending as follows:Firstly, this paper designs loan contracts for different types of groups, in order toseparate different types of groups in the market, and improve the efficiency of themarket matching.Secondly, this paper analyzes monitoring mechanism of this form. Theintroduction of joint liability and network information disclosure system canmaximize effectiveness of supervision. Different supervision modes analysis resultsfind out that under different monitoring mode, members monitoring level is different, and "free-riding" problem exists among the members, but it can be solve byintroducing leaders, meanwhile the effective monitoring level rises. Research resultsindicate that member enterprises with greater re-financing need can be chosen as aleader, but if the leader is chosen from borrowers, it abides by being good at receivinginformation, and big investment proportion. Then incentive mechanism of borrowergroup leaders is constructed.Thirdly, the appropriate incentive mechanism is designed to improve repaymentprobability of P2P group lending and levels of monitoring and punishment.Sequential lending can improve monitoring level among the members and reducemoral risk.Finally, based on the front model results and the present situation of P2Pplatform development, this paper proposes group lending can play a better role inonline lending, and joint liability mechanism should be introduced into this model,and puts forward some suggestions on the development of online P2P lending.