Research On The Legal Risk Of P2P Network Lending In China

As an emerging informal finance, P2P network lending has swept the world in a short span of8years since it first appeared in the UK on March2005. By virtue of perfect social credit system, P2P network lending abroad has entered a mature stage of development. In contrast, P2P network lending in China is still in the initial stage, but the speed of development is amazing. With the continuous expansion of P2P network lending industry, the credit risk, market risk, system risk is gradually revealed. By analyzing the legal relationship of P2P network lending, focusing on analysis of the legal risks faced by lenders, borrowers and P2P platform, this paper aims to propose suggestions to relevant legal regulation so that it can be useful to the healthy development of P2P network lending industry in China.In addition to the introduction and conclusion, this paper is divided into three parts:The first part is an overview of P2P network lending. Firstly, it discusses the reasons for the rise of P2P network lending and the main characteristics of P2P network lending.Secondly, it introduces and compares the main P2P network lending operation mode between China and abroad, Kiva mode, Prosper mode as well as Zopa model are the examples of foreign countries, Yinong mode, Paipai mode and Yixin mode are examples of China. Finally, it sorts out the legal relationship existed in P2P network lending, including loan contract, brokerage contract, commission contract and the assignment of creditor’s rights.The second part is the analysis of legal risks faced by our P2P network lending. It analyses the legal risks mainly from the point of view of the lenders, the borrowers and the P2P platforms, including the borrower’s default risk and the P2P platform’s "inside job" risk that the lenders may face, the risk of information leakage that the borrowers may face, the uncertainty of positioning, the great possibilities to be involved in illegal fund-raising or to be the tools of money laundering that P2P platforms may faceThe third part is the proposal of the legal regulation of P2P network lending. Firstly, we should strengthen self-construction of P2P platform,, including clearly locating the position, establishing a sound internal control and enhancing information disclosure; Secondly, we should strengthen the external supervision and management, including perfecting relevant legislation, determining the subject of supervision and regulatory responsibilities, standardizing the market access and withdrawal mechanism; Finally, we should perfect the supporting system construction, mainly refers to the perfect social credit system and anti-money laundering system.