Case Study On Personal Credit Risk Control Based On Yirendai

With the continuous innovation of Internet technology and the combination of Internet technology and traditional finance,Internet finance is becoming the trend in future financial industry.P2 P,as a typical model of Internet finance,develops rapidly with its advantages of simplicity,convenience,low cost and high return.However,the constant explosion of Internet P2 P platform hinders the sustainable and healthy development of the industry.Credit risk of borrowers is an important cause of P2 P lending problems on the Internet.The personal credit risk of the online lending platform is mainly due to insufficient review of the borrowers,the borrowers will be unable to repay the loan or the borrower maliciously breaches the contract.This damages the interests of the platform and the lenders.Therefore,it is important for industry to correctly understand the credit risk of P2 P online loan borrowers and analyze the reasons,then propose the personal credit risk management and control measures of borrowers.This paper selects Yirendai as the case analysis object because of stable operating status and complete information publicity about company’s operation.As a veteran P2 P platform,after several severe tests in the online lending industry,the risk control system is mature and the platform overdue rate is relatively low.Therefore,the personal credit risk it faces is more representative in the industry,and its control of credit risk has reference values for other platforms.Firstly,this paper starts with the development history and current situation of P2 P online lending industry in China,and analyze the transmission path of credit risk,concludes that the borrower’s credit risk is the origin of the problems in online lending platform.Then it introduces the business process and product model of Yirendai,and analyses the personal credit risk points and the process of credit risk control of Yirendai from the three links of pre-lending,loan-lending and post-lending.Thirdly,this paper analyses the effect of credit risk control of Yirendai according to asset quality and profitability,and points out some problems existing in the control of personal credit risk of Yirendai under the new supervision system and market environment,including the excessive proportion of high-risk users under the business expansion,the high cost of borrowing,the existence of connected guarantees and risk reserve,insufficient management ofpost-loan collection and the lack of investor education.The internal and external causes of credit risk management problems are deeply analyzed,including the deviation between the actual operation of the platform and the market positioning,the insufficient internal control management of the platform,and the external reasons mainly include the imperfect credit system,the imperfect supervision mechanism of the P2 P industry and the intensification of vicious competition in the industry.Finally,according to the results of the case study of Yirendai,this paper puts forward suggestions to improve the personal credit risk management from the two aspects of government and platform.