Research On Pricing Deviation And Default Risk Of P2P Borrowers

Peer-to-peer(peer-to-peer)online lending has provided great convenience and wide space for many small and micro businesses and individuals who are in urgent need of funds but are shut out by Banks in recent years,and the development momentum has been rapid.Since its birth,China's P2P industry has experienced several twists and turns in its development process,during which there have been several serious platform thunderstorms,which have hindered the healthy development of the industry.Default risk has become an unavoidable problem in P2P industry,resulting in the loss of capital allocation efficiency in this industry.On the other hand,under the background of interest rate liberalization,interest rate pricing in P2P industry is far from fully market-oriented,and the pricing efficiency is an important index to evaluate the operation of capital market.Therefore,it is of great significance to explore the influencing factors of pricing efficiency in China's P2P market,as well as the mechanism and actual effect of pricing efficiency on default risk,not only to find out the risk distribution of online lending,but also to improve the construction of long-term supervision mechanism of China's Internet finance and the efficiency of capital allocation.In this paper,first of all,by means of literature review,the research focuses on such topics as "pricing efficiency","default risk" and "pricing efficiency affects default risk" are sorted out.Then,this paper expounds the connotation of pricing efficiency from the perspective of intrinsic value of capital,information transfer ability and individual expected utility,and divides the default risk of borrowers into "premeditated"and "non-premeditated" from the perspective of default motivation,and explains the micro mechanism of default caused by pricing deviation through cost theory.Then,the principle of stochastic frontier model is introduced in this paper,and the pricing deviation index is constructed with stochastic cost frontier method.Finally,this paper conducts an empirical analysis based on the influence factors of OLS model,Probit model and Tobit model on pricing deviation,and the influence of pricing deviation on default probability,default loss rate and overdue number.The conclusion of this paper suggests that the pricing efficiency of borrowers is limited by their personal and behavioral characteristics,which leads to a certain degree of pricing deviation of borrowers.Borrowers try to reduce the pricing bias and reduce the cost of financing through information whitewashing.However,whitewashing not only fails to reduce the pricing bias,but even has the opposite effect.The existence of pricing deviation leads to the increase of borrowers' financing cost,which leads to the fact that borrowers are more likely to be unable to repay when they encounter uncontrollable factors and changes in remaining funds,leading to "non-premeditated"default.More specifically,pricing deviation not only leads to the increase of default probability,but also leads to the increase of default loss rate and overdue number.The conclusion of this paper provides a kind of circumstance of borrowers' passive default and supplements the borrowers' default risk,so as to help to distinguish different situations and classify the risk of online loan.This paper gives some policy Suggestions from the perspective of promoting the marketization of Internet financial interest rate and the risk classification of online loan.