Research On Risk Control Of P2P Network Lending

P2P means peer to peer lending. It refers to all the steps in debit and credit transaction, including contracts, capital and so on. It is a new financial mode growing with the development of the Internet and private lending. Its biggest advantage is that the borrower can fully experience the high efficiency and convenient lending process of Internet which traditional banking business is difficult to obtain. On the one hand, it can help improve the awkward situation of SME financing, on the other hand, it can provide the channel for low-income people to deploy their capital.The emergence of P2P is the product for integration of Internet technology and finance. Generally, there are two statement of the origin of P2P. One is Muhammad Yunus who is the father of microcredit in Bangladeshi, another is the UK website Zopa. Since 2006, P2P lending platform in China began to sprout, and from 2013 it began to rapidly grow. In 2013, the total transaction size of P2P industry exceeded $ 100 billion, which is more than six times the previous year. The number of P2P transaction platforms from about 200 in 2012 to the current 1000. Although the development of P2P is fast, the attendant to risks cannot be ignored. Inherent uncertainties in the P2P platform make it important to determine the credit willing and credit capacity with the background of incomplete information. Since it is not long for P2P market development in China, the lack of market regulation gave an opportunity to speculators.Expansion of this industry is faced with many difficulties. From 2013, with the rapid expansion of P2P lending platform, bankruptcy rate is also growing. There are over seventy platforms, involving more than 1.2 billion yuan closed platform in 2013. Overall overdue rate of P2P lending platform is more than five percent while the risk still kept rising. If risk management cannot follow-up in time, the industry is difficult to develop sustainably.This paper is divided into five parts:The first part is introduction. It includes the research background and significance and innovation and shortage of this essay, indicating the contents of this study. The second part describes the risks and risk control of P2P lending, as well as traditional banking risk control system, and the comparison of differences between the two. The third part describes constructing the risk monitoring system of P2P network lending. The fourth part, with the case of CreditEase, the paper details the development process, problems and risk control, and put forward the author’s views to further improve CreditEase’s risk management system. The fifth part based on three perspectives-micro, meso and macro to explain the various P2P network lending platform, explaining appropriate policies and measures P2P network lending industry and how to prevent the risk for the relevant regulatory authorities.