Research On Risks And Government Regulation Of Peer To Peer Lending Company

In recent years,the Internet Peer to Peer Lending industry in China has become a social problem.The risks accumulated by the lack of supervision and disordered expansion in the early stage of the industry exploded in these years,various problems have caused millions of investors hundreds of billions of capital losses.Under the goal of “clean up” of the regulators towards the industry,the number of operating platforms has continued to decrease and has the trend of accelerating the elimination.Why almost half of the companies in the industry have serious violations,why the regulatory authorities have paid attention to this problem in 2013 but can not prevent the spread of risk in large scale,why so many investors are misled to participate in investment,how to strengthen supervision and avoid similar situations happen again in the future is the issue this paper wants to summarize and study.This paper reviews the development of Internet Peer to Peer Lending(P2P)Industry,and analyzes the risks and causes of the risks through three typical cases of the industry and the information obtained from the experience description of nearly 100 real P2 P borrowers.Summarize that the risk of online loan industry is mainly because of its high interest rate,which mainly resulted the high default rate caused by bad credit borrowers.The lack of effective control over the flow of funds by supervision creates opportunities for corporate fraud in an environment where company can easily misappropriate funds and are not easy to be found.A large number of investors participate in the investment that is not suitable for them because the supervision fails to correct the misleading propaganda in time and effectively.The punishment for violations and crimes is too mild caused the supervision failed to effectively stop the illegal activities even encouraged crimes to some extent.Then this paper summarizes the supervision of the Internet Peer to Peer Lending industry in China,analyzes the supervision effect and the weak points,and puts forward relevant suggestions for improving the supervision of the P2 P industry.