Research On The Reaons And Prevention Measures For The Credit Risks Of Network Lending

Nowadays banks are more stringent and demanding while making loans,and it is getting more and more difficult for small and medium enterprises and ordinary people to get money from banks.In this context,as a representative of the Internet financial,but also a new way of private lending loans came into being.Network lending,with theadvantages of fast,efficient,low barriers for traders,grows and develops at an alarming rate across the country.However,with the rapid development of network lending,its risks and problems began to gradually appear.Many network lending platforms collapsed or ran away,and a lot of borrowers did not repay back the money of the investors.All these caused great lossesto investors.The credit risksof network lending attracted wide attention of the whole society.Therefore,further study of the causes of the credit risk of network lending,and accordingly developing an effective network of prevention measures for network lending credit risks have already become a top priority to ensure the healthy development of the network and to promote the lending industry.Based on theresults of previous studies and combined with the current status of network lendingindustry,this paperuses the asymmetric information theory,credit rationing theory,principal-agent theory and other methods to analyze the performance and origin of network lending.Its performanceinclude that the bad loan ratio of network lending is high,it involves many investors and a large amount of money,network lending platform failures occur frequently and the phenomenon that the owner of the network lending platform runaway is serious.The credit riskscome from the borrowers,thenetwork lending platforms and the guarantee institution respectively.At the same time,the article uses the game theory to analyze the decision process of the borrower and the lender,and concludes that the information asymmetry increases the credit risk of the network loan.At present,the credit system of our country is not perfect,and the borrower can't get the incentive to payoff the debt and thus it is needed to increase the penalty for the borrowersthat breach contracts;the lower the loan interest rate of the platform,the less likely the debtor to default,and it is necessary to find a way to calculate the net interest rate.Then the Logistic regression model is used to further analyze the causes of the credit risk of the network loan.The conclusion proved that the results result from the analysis of the game theory is right,and it also proved that the credit rating result of the borrower is not accurate which is also the cause of the high credit risk of the network loan.The article then analyze andsummarizes the current network loan credit risk prevention measures and their shortcomings,and finally combined with the causes of creditrisks of network lending,the paper comes up with the corresponding credit risk prevention measures and proposals:firstly,to accelerate the improvement of credit system;secondly to increase the cost of borrowers that breach the contracts and to accelerate and to implementthe client funds protection system;thirdly to make reasonable interest rate of network lending;to makethenetwork lending platform to improve the internal control system;then to enhance the awareness of risk prevention of the investors;finally give full play to the role of industry self-regulatory organization.This paper hopes to provide reference for the relevant departments to improve the credit risk prevention measures,strengthen the industry credit risk management,promote industry norms,healthy development and so on.