A Case Analysis On Risk Management Of Consumption Loan Products On The K Network Loan Platform

In recent years,people’s living standard has been significantly increased.Along with the broadening of investment range and change in consumption mindset,people’s attitude has shifted from saving to consumption,and consumption,as a major factor,is playing a more and more important role of propelling the growth of our domestic economy.These phenomena effectively promoted the growth of our domestic market in consumption loans and enriched people’s options in consumption and further spurred economic development.In the current social environment,consumption loan becomes the emphasis in development.Chinese government also encourages innovation in consumption loan products,rendering huge potential for growth for the consumption loan market.On the other hand,with the widespread application of internet technology in everyday lives,P2 P network loan platforms have permeated people’s lives and supplemented the real economy of traditional financial institutions such as banks and trust companies.Since 2016,a series of policies were carried out to strengthen the level of supervision.These policies made the regulations over the nature of network loan platforms and the boundaries of business,and gave the specific requirements for businesses of platform.In this transition from chaotic to professional,network loan platform should not only follow the guidance of regulatory management,but also take initiatives in exploring alternative paths and seeking survival and development.Along with the wave of consumption finance,more and more network loan platforms start to lay out consumption loan market,develop their own consumption loan products,and enter specialized markets such as daily consumption,automobile,tourism,and medical cosmetic,etc.However,in the process of developing,the lack of regulations over the market and inexperience in supervision have cause many risk problems to occur,which not only damages to the business of P2 P platforms,but also is harm to the interests of investors.Risk management is an indispensable part of the operational process of P2 P network loan platforms,and effective risk management is essential to the development of the industry.The imperative task to resolve right now is how to correctly appraise the risks of P2 P network loan platforms,and how to set risk control strategies in order to potently decrease and avoid the probability of risk occurrence.This essay recognizes and analyzes the risks that the industry of network loan platform faces,using methods including literature review,case studies,theoretical researches,the integration of quantitative and qualitative analysis,and the utilization of relevant theories such as life circle consumption,asymmetric information,herding effect and comprehensive risk management.First,the article elaborates the research background and framework,and makes macro analyses regarding the consumption loan industry as well as the development of consumption loan in P2 P industry on the basis of summarizing domestic and international researches.It lists the major risks and their causes of domestic P2 P network loan industry while introducing basic concepts.Moreover,this article uses K network loan platform,a major platform in the region,as a case study.The summary shows its operating conditions and the characteristics of the consumption loan product,and through comparison forms a descriptive analysis conclusion.Then,appraise individual credit risk,which is the most important link in consumption loan services,with logistic regression model to find the most influential factor in loan condition.On the basis of theoretical and empirical analysis,the article finds that the case study has problems regarding risk management both internal and external of the platform.Again,based on specific suggestions from analysis conclusion,platforms can improve their current condition through aspects such as strengthening the audits,perfecting system construction,and diversifying their products.Finally,the essay provides a future outlook while summarizing the logic and thoughts of the full text,acts as a reference for other network loan platforms in the industry on the basis of the improvement of K network loan platform risk control system of consumption loan,and promotes the healthy development of the whole industry.