Evaluating Risk And Countermeasure In Online Peer-to-Peer Lending

With the advent of Web 3.0, it has become easy to create a breed of financial transactions based on networking topologies without the intermediation of a traditional financial institution, that is Online Peer-to-Peer(P2P) lending, which occur directly between individuals. While Online P2 P Lending can match the demand for personal funds, which can be used to provide the utilization ratio of idle capitals and personal credit system in financial market, the flow of funds in the market has a great role in promoting.However, such mechanism involves lending risks associated within informal lending. Despite current online P2 P lending company collaborate with the tripartite business on the purpose of the funds supervision based on the uncertain factors in online environment, which eliminate funds misappropriation, embezzlement, hidden risk, the borrower’s investment can not return effectively without mortgage once happening the default by borrowers or operation risk in online P2 P lending. For current P2 P lending, the key problem is how to effective risk precaution in bankruptcy rate at any time. A lot of seemingly normal operating condition of the P2 P network lending platform may suddenly collapse or running, therefore it explores the importance of forecasting risk further to effectively measure the risk in online P2 P lending.By comparing the traditional bank-lending markets, risk measurement model in current online P2 P lending help to minimize the risk with qualitative analysis, which is concentrated in the borrower’s overdue rate analysis and is rarely focused on default rate by borrowers. It is still a lack of overall risk measurement due to less examination in causal analysis and credit rating. The purpose of this article is to evaluate the risk of online P2 P lending based on qualitative and empirical analysis for effective risk precaution in online P2P lending.