Research On Financial Crisis Of P2P Lending Companies

As an important part of Internet finance,P2 P lending has gradually attracted people's attention since entering the Chinese market.In these ten years,the P2 P industry has gone through several development stages.P2 P network lending highly integrates the advantages of the Internet and traditional financial services,also it promotes the development of inclusive finance and provides great help for private capital injection.However,many risks have been exposed during the development of P2 P lending companies.So far,many kinds of financial crisis have been erupted and lead to negative effects of the he entire industry.The research on the financial crisis of P2 P lending companies is beneficial to the managers of P2 P companies to raise their awareness of crisis,prevent the crisis early,and summarize them to achieve the purpose of dynamic management effectively;it is beneficial for P2 P users to enhance their investment confidence and meet their financial security.And also beneficial for the government and relevant regulatory agencies to accelerate the structure of the regulatory system,and guide a sustainable development of the industry.Through theoretical analysis and literature research,this paper finds that the financial crisis of P2 P lending companies has unique characteristics such as wide audience,large amount of capital,complicated and diverse causes.At present,there are several financial crises in P2 P industry: Continuous loss type,insufficient liquidity type,overdue bad debt type,illegal business type and internal control missing type.Further analysis of the causes,including the costs out of control,backward of risk management technology,imperfect of the internal control system,price determination is arbitrary,single product structure,and the risk from the P2 P platform users.This paper takes well-known P2 P company China Rapid Finance Limited(abbreviated as XRF)as an example,and expounds the basic situation of XRF and the current status of the company.To analyze the financial crisis caused by the continuous loss,lack of liquidity and rising overdue rate of XRF,and to study the targeted measures taken during the financial crisis.The response to the financial crisis of XRF is worth of thinking.The P2 P companies should choose a compliance business model,control costs and expenses,improve the pricing mechanism,implement the borrower review process strictly,build the financial crisis early warning system,and find an accurate marketing position to against financial crisis effectively.