The Building Of Rating System And Research Of Credit Risk Control On P2P Lending Platforms

Financial innovation is changing the way of investment and financing of people in full swing. With the advent of the on line financial Times, the traditional financial model is being broken gradually.The peer to peer lending has expanded rapidly since it came to China.it brings “timely rain” for private lending. However, there are many problems such as bankruptcy, collapse, or even “Paolu” in the development of P2 P lending. Now,the study on P2 P lending is less.The risk control of P2 P lending will be the key factor about the healthy and sustanable development of the industry in the future.Nowadays,the individual credit system is not prefect. Although the central bank of China is actively strengthening the construction of individual credit system,we don't have a authoritative credit rating agency to offer a convincing credit scoring system.Because of this,the credit environment in China can not compare with The United States and other developed countries. The design of rating system on P2 P lending can't as simple as abroad because of the absence of external ratings and the bad credit environment.We find improvement of rating index about the P2 P lending by combing and comparing the rating index of traditional and mature commercial bank and rating system of a large bus finance company. Then, we update the system of P2 P lending rating.after that,we introduce the Analytical Hierarchy Process to determine the weight vector of each rating index. P2 P lending platforms are confronted with many kinds of risk.The most important risk is Credit risk.By an example of the value at risk calculation,we explore how to introduce CreditMetrics model based on value at risk to the risk control of P2 P lending platform. P2 P lending platform has the advantage of using this method. The large number of transactions take place on P2 P lending platform every day. So, we can be easy to obtain the model parameters in the era of big data.