Research On Credit Risk Assessment Of P2P Lending

In recent years,the rise of the Internet financial market access to the public attention.Among them,as the representative of innovative financing model,P2P lending has achieved the preferences of both borrowers and lenders,with its lower financing threshold,more convenient operation of the financing and higher investment income and other characteristics.As the end of December 2015,P2P lending platform has reached 2395 in China.The explosive growth induced many problems at the same time,only in the year of 2015,the number of bad platform has reached 896.With the strict regulation,the proportion of problem platforms decreased from 60.38%by the end of 2015 to 44.68%in June 2016,which means that the main emphasis of the risk control in P2P industry is moving from the malicious operations of the platform to the business itself.For the platforms and the borrowers,the biggest risk they face is the credit risk,and the borrowers' credit status is related to the investors' return on investment and the reputation of the platforms.Therefore,it has important practical significance to set up a credit risk evaluation model according to the characteristics and the development of the industry,which can protect the legitimate rights and interests of the investors and reduce the evaluation cost of the platforms.In the past,credit risk assessment of P2P borrowers has often adopted the method based on judging accuracy rate,which can not be fully applicable,since there are obvious cost differences between misjudged default users and misjudged normal users.Under the background of what mentioned above,this paper studies how to evaluate the credit risk of borrowers in P2P lending from the cost-sensitive perspective by using data mining technology.Works that the thesis mainly done can be listed as the following work:First of all,with the depth 'analysis of the credit risk assessment of P2P lending and the studies of different credit risk assessment methods,decided to use the decision tree as an evaluation model when considering the application of the applicability.Secondly,the model C4.5cs is introduced to solve the cost-sensitive problem in the field of credit risk assessment of P2P lending.Define the cost matrixes from the views of investors and platforms according to the characteristics of the P2P industry.Thirdly,using the reptile technology to obtain the transaction data from domestic representative platform "Renren Dai",the data were processed by the single value padding method,and the data was discretized by MDLP stop criterion,then realize the C4.5cs model on the Matlab,Through the performance of evaluation indexes such as accuracy rate,false positive rate,ROC curve and cost reduction,proved that this model not only has good evaluation ability,but also can greatly reduce the cost of misjudgment.At the same time,the conclusion of clear evaluation rule can be obtained.Finally,according to the empirical study and the analysis of present situation,this paper puts forward some suggestions to improve the credit risk assessment of P2P lending.