The Role Of Risk Guarantee Fund On The Behavior Of Lenders In Online P2P Lending

With the rapid development of internet technology and the widespread popularity of smart phones, the combination of internet and finance effectively improve the life quality of modern people. Online P2P lending, which is one of the important parts of the internet finance, makes it become reality that cross-regional individuals can establish direct debtor-creditor relationship, and this association is established through the Online P2P lending platforms. The development of Online P2P lending broaden the scope and quantity of traditional folk lending, and effectively solve the shortage of credit funds existing in the traditional lending markets. Because of the deficient of the domestic credit system and the low cost of the default in Online P2P Lending, Online P2P Lending platforms in China try to attract the focus of individuals through proving Guarantee Mechanism, which is rare abroad. Risk Guarantee Mechanism is has been adopted by most of the platforms in China and there is a big vacancy in the study of the role of Risk Guarantee Fund in Online P2P Lending environment. Therefore, on the basis of the trade data of the Online P2P Platforms in China, this article explores the role of Risk Guarantee Fund provided by platforms on the behavior of lenders.Combining the more serious asymmetric information problem in Online P2P lending environment, this study puts forward three hypotheses about the behavior of lenders based on the predecessors’ theories about information asymmetry and the guarantee mechanism in the traditional finance market. Based on the literatures about the factors that influence the behavior of online lenders, this paper establishes the evaluation index system and the primary funding model. The 4 dimensions included in the evaluation index system are borrower risk information, listing information, demographic information and guarantee information. In the empirical analysis, this paper first clean up the data collected from PPDai.com and RRDai.com, then provide the preliminary results about the factors through descriptive statistical analysis. Finally, this paper test the hypotheses through the success rate regression model. The results show that the historical risk information of the borrower is the most significant factor that influence the choice of lenders. In addition, investors pay more attention to the interest rate and the loan term; Risk guarantee fund has a positively direct effect on the decision of lenders. At the same time, this guarantee also has a mediate effect between the risk level and the behavior of lender.