Determinants Of Default Risk In Online Peer-to-Peer Lending

As a new form of lending,peer-to-peer lending(P2P lending)skillfully combines the Internet,innovative financial model and micro-credit technology,and plays the role of connecting credit parties through the main form of its third-party network platform.The earliest P2 P lending platform in China was established in 2007.After more than ten years of development,the domestic P2 P lending industry has gradually developed and expanded,showing great market potential.As of November 2018,the total number of P2 P lending platforms in China has reached 6431,among which the number of normal platforms is 1189.In November 2018 alone,the total turnover of all platforms reached 11,454.3 billion yuan,and the comprehensive reference rate of return was about 10.11%.However,since 2014,Chinese P2 P lending platform "thunderstorm" phenomenon occurs frequently,one of the reasons that cannot be ignored is the concentrated run of investors caused by default of borrowers.Based on the theoretical analysis of the default of P2 P lending,this paper analyses the default behavior of borrowers of Lending Club platform,the representative platform of the U.S.P2 P lending industry.In the preliminary discussion process,this paper focuses on the analysis of the development process of the U.S.online lending industry,and the default rate of Lending Club platform.Then this paper summarizes its wind control policies for the default behavior of platform borrowers.The conclusion shows that the default behavior of platform borrowers is not only related to the macroeconomic situation and borrowers' own factors,but also to the wind control policy formulated by the platform.The analysis finds that Lending Club's existing borrower default risk control syste m mainly concentrates on project auditing,transaction cost determination and interest rate customization.In order to deeply analyze the influencing factors of borrowers' default behavior in P2 P lending,this paper uses 38092 valid samples of Lending Club platform to establish a Logit model for borrowers' default behavior in P2 P lending platform,and carries out empirical verification.It is found that the larger the total amount of loan,the longer the repayment period and the higher the interest rate,the lower the credit rating of the borrower,the greater the repayment pressure and the higher the probability of default of the borrower;the more bad historical records of the borrower,the higher the probability of default of the borrower;although the working life of the borrower is very significant,the coefficient is small,that is,the contribution to the borrower's default behavior is small;All kinds of bank accounts and historical breaches of contract of the payer have certain explanations for their breaches of contract.Based on the analysis of the borrower default risk control system of Lending Club platform and the influencing factors of the platform borrower default behavior,this paper provides corresponding policy recommendations for the P2 P le nding industry in China.In terms of industry supervision,the regulatory authorities should restrain and tolerate moderately,clarify the principles of access and exit of P2 P lending industry,standardize the platform information disclosure system,increa se the cost of platform crime,and improve the effective eligible investors access system.In terms of P2 P lending platform,the platform should improve the information data set of borrowers,establish a multi-channel information authentication model,improve the personal credit information system,and provide necessary help from industry associations.At the same time,the short-term platform should improve the third-party risk protection mechanism,and in the long run should upgrade the Internet technology and develop financial science and technology.In addition,borrowers should strive to improve their own credit level,investors should carefully choose the P2 P lending platform,and improve the self-investment and financial knowledge reserve.