P2P Online Lending Risk Research

P2P online lending is a new mode of financal service through the Internet which is booming in recent years. It plays a vital role to solve the problem that traditional financial service can’t coverage the whole lending market. But currently in China, P2P online lending faces many serious problems and risks. The P2P companies’ bankruptcy risk and the borrowers’ default risk make the lenders’financal security can’t be guarateed.This paper mainly analyzes two major risks faced by the lenders, P2P lending companies’bankruptcy risk and the borrowers’credit risk of non-payment or late payment.Firstly, we compare P2P online lending with traditional financing service, analyze the unique characteristics of P2P online lending, and the differences in credit risk.Secondly, we analyze the bankruptcy risk of the different types of P2P online lending. These types of P2P online lending include the pure P2P type that the P2P lending platform is just simply as an information intermediary, the guarantee P2P type that the P2P lending platform guarantees the lenders’ financial security; the P2N type that P2P lending platform cooperate with small loan companies and guarantee companies who provide loans and guarantees, and the P2P lending company is not involved in the development of the borrower and the guarantee directly. Then we focuse on analyzing the characteristics of the P2P lending companys that have occurred problems from June 2006 to February 2015, including the problem occurred time, the problem occurred area, problem type, registered capital, survival time, the amount to be received and the operation mode.Thirdly, we use the asymmetric information theory and game theory to analyze the causes of borrower’s default. Meanwhile, we use the computer program to collect the transaction record and borrowers’information in the P2P online lending website, then analysis the sample data through the two element logistic regression analysis and statistical analysis.Fourthly, according to the analysis of bankruptcy risk of the P2P online lending platform, and empirical analysis of borrowers’ default, we put forward the proposal on operation and regulation of P2P online lending respectively. For the operation mode of the P2P online lending platform, we think that P2P online lending platform should gradually return to the pure information intermediaries, with no participation in the borrowers’ principal development and principal advance. According to empirical results, among the information on the borrower and the loan, we should especially focus on two points:the borrowers’ identity characteristic the characteristics of the interest rate and loan term. At last, we make some suggestions on the supervision of P2P network lending platform in terms of access, position, regulatory agency and the credit system.