The Research Of P2P Lending Default Risk

Short for P2 P is Peer to Peer. It is a form of folk lending and an innovation in the lending industry. P2 P lending industry in C hina began in 2007. After several years of development, the number of P2 P platform has been developed from zero to more than one thousand [1]. P2 P lending industry has became the important investment and financing channels of small and medium enterprises and individuals. While the P2 P lending industry develop ing rapidly and providing service for lenders and borrowers. It also makes investors face a lot of risk, and the most common is the default risk. High default rate is a serious threat to the interests of investors. So researching the default risk of P2 P lending industry, mastering the influence factors and causes of the default risk, and finding the effective measures to guard against the default risk, is the key to the healthy development of P2 P lending industry.The second section of article analyses the causes of default risk. The most fundamental reason is information asymmetry. Second, low credit of borrowers in P2 P lending industry, high loan interest rate, difficult collection, lack of supervision and so on are also the important causes of default risk. The control of default risk in the final analysis is the co ntrol of the causes of default risk. Therefore, analyzing the causes of the default risk is the basis of finding the preventive measures against default risk. The third chapter selects the borrower data on the peer-to-peer lender platform and makes an empirical analysis of the influence factors of the default risk by using binary choice model. It is concluded that the borrower’s qualification, gender, credit rating, home ownership all will affect the platform’s default risk.Ultimate purpose of the article is to control default risk based on the analysis of default risk, and reduce default rates of P2 P platforms. The fourth chapter selects peer-to-peer lender platform which develops early as the case that analyses the default management of C hinese P2 P lending industry. So far, although C hinese P2 P platforms take many measures such as establishing risk allowance account or limiting the loan amount to reduce the risk of default, there are a lot of problems in the default risk management. In the P2 P lending industry, the credit rating system is not perfect, the borrower information authenticity cannot be guaranteed, and the principal security system is not sound. The fifth chapter analyzes the default risk management measures of Zopa and Prosper which are typical P2 P lending platforms in Britain and the United States, and summaries up that the enlightenment of P2 P lending industry abroad to C hina on the default risk control.Finally, according to the result of empirical study and case study, and aiming at the deficiency of the P2 P lending default risk control in China. Nine Suggestions are put forward in the article from unifying standards for admittance into industries, improving the supervision mechanism, cultivating a third party credit rating agencies, establishing special risk control department, cooperating with traditional lending companies, setting up the circle of friends in platform, setting up a blacklist system, stipulating the minimum standards for the loan, using big data and so on.