Research On Risks And Solutions Of P2P Lending Platforms In China

In recent years, as an important part of financial areas, P2 P network lending platform has developed so fast. The number and the scales of P2 P network lending platforms are increasing rapidly. The fast development has raised the focus of traditional financial institutions. Unlike cumbersome procedures of traditional financial lending, it helps both lenders and borrowers to deal directly through the Internet platform. To some extent, P2 P lending fills the gaps in traditional financial system and it helps marginalized groups of traditional financial achieve the financing needs. Meanwhile, it made idle funds be used more reasonable. It also promotes the development of China’s finance system. Bank of China and other 10 ministries issued “Guiding Opinions on Promoting the Internet finance develop healthy”(hereinafter referred to as “guidance”)in July 18 of 2015. By the end of year the CBRC jointly relevant departments issued “Temporary Interim Measures on Network lending information agency operational activities”(draft)(hereinafter referred to as the “Rules”). At present P2 P lending has said goodbye to the era of unregulated and the identity of P2 P network lending platform has been legitimized. But at the same time, the risks of the P2 P lending have not issued with the rules eased. A large number of potential risk exposure, bankrupt or escape with money abruptly and illegal fund-raising may have an potential outbreak. The risk may have a trend of deterioration.Since relevant departments issued regulatory policies, the operational mechanism of network lending platforms has changed a lot. Therefore, we need a detailed analysis of the operational system in typical platforms and investigate its potential risks. Then we can put forward the countermeasures against the risks. In this way, investors could have the ability of choosing the desired investment platforms. In addition, it can also prevent the risk of P2 P lending platform effectively.The first chapter of this article introduces the development of P2 P network lending and then describes the purpose and significance. The fundamental theory of P2 P network lending are asymmetric information and credit rationing and credit risk. Secondly, by introducing the basic overview, the relevant definition and the development status of P2 P network lending, we can have a more detailed analysis of P2 P lending network. Meanwhile, this chapter analyzes the new features under the supervision policies. Thirdly, this paper chooses three typical domestic P2 P network lending platforms to analyze their own operational mechanism under the new policies. Then this paper draws the conclusion of their main potential risks and discusses their differences between operational mechanism and risks. Therefore, in order to control the risks of P2 P network lending platforms, we should strengthen credit assessment system, improve risk assessment mechanism, drive business model innovation and improve users’ level of investment.