Study On P2P Lending Markets And Personal Credit Information System

In 2005,the world’s first P2 P network lending platform-ZOPA appeared in the United Kingdom.P2 P network lending is a new type of lending model that allows lenders and borrowers to establish a direct lending relationship through the internet.It has the advantages of low threshold,simple procedures,and easy operation,which is favored by both lenders and borrowers,and has been rapidly developed in major countries all over the world.China is the country with the most rapid development of P2 P network lending in recent years.On the one hand,China’s government has transformed the way of economic growth and increased the position of consumption in economic growth.The concept of consumer spending has gradually changed and the demand for consumer credit has grown rapidly.On the other hand,traditional bank lending still has higher credit thresholds,complicated procedures,with a serious shortage of consumer credit.The contradiction of supply in the consumer credit market has brought tremendous opportunities for the development of the P2 P network lending.However,the rapid development of China’s P2 P network lending industry has also exposed many serious problems.Platform fraud,running,too many borrowing channels for borrowers,with malicious breach of contract have frequently occurred,which has seriously affected the reputation of the industry and hindered the healthy development of the industry.With the continuous strengthening of supervision,especially the implementation of the investor depository system,the occurrence of platform fraud and other issues have been restrained,and the borrower’s credit risk has become a potential threat to the development of the industry.The asymmetric information in the P2 P lending market is the main cause of credit risk in the industry.Borrowers have obvious information advantages in the transaction process,which may lead to “moral risk” and “adverse selection risk”.A sound personal credit system can effectively alleviate the information asymmetry in the P2 P lending process,which helps the P2 P platform and investors to identify the borrower.At the same time,a perfect personal credit information system can also guide the borrower’s faithful compliance,avoid breach of contract,and reduce the post-loan management difficulty of the P2 P platform.China’s personal credit information business started relatively late.Now a unified personal credit information system was initially established.China’s personal credit information system is centered on the central bank’s personal credit information system,and market-based credit information agencies are widely involved.Data sources are continuously enriched,and the number of people covered by the system is continuously expanding.However,there are still many deficiencies in China’s personal credit information system,including the unsound system of laws and regulations,the fragmentation of data sources,and the lack of a mature business model.The imperfections of the personal credit information system have seriously hampered the development of the P2 P industry.Specifically,the P2 P platform has difficulty in accessing the personal credit information system of the central bank.This not only increases the difficulty of credit collection and credit costs for the P2 P platform,but also increases the difficulties of post-loan management.The imperfection of the credit information system is one of the reasons why the platform generally provides guarantees.The guarantee behavior of the platform concentrates credit risks and brings instability to the financial system.The establishment of a unified and perfect personal credit information system as soon as possible is an imperative for the development of the P2 P network lending industry.In the case that China’s personal credit information system is not yet sound,the P2 P platform needs to use multiple methods to identify the borrower’s credit risk.What this article wants to understand is whether the platform can accurately price the borrower’s credit risk.Does the platform’s disclosure of borrower information help investors make the right investment decisions? Is there a bias between the platform and investors’ judgments? In this paper,we use the well-known P2 P network lending platform – Renren-Loan’s transaction data to conduct empirical research,and draw the following conclusions: First,although China has not yet established a complete personal credit system and has not yet launched a mature personal credit product.The P2 P platform can better identify credit risk through extensive collection of borrower information.Second,the information disclosure of the borrower by the Renren-Loan platform can help investors make reasonable investment decisions,indicating that investors have certain risk identification capabilities;Third,P2 P platforms and investors have certain deviations in the identification of certain risk factors.Fourth,by comparing the empirical results of Renren-Loan and Lending Club,it is found that Renren-Loan’s lending platform lags behind in the accuracy of risk pricing.This paper demonstrates the important role of personal credit information system in P2 P network lending through theoretical models and empirical research.A perfect credit information system can improve the P2 P platform’s credit information efficiency and reduce the credit information cost,which is an important basis for the development of P2 P lending.The establishment of a personal credit information system is a large and complex system project,including the collection of credit data,the definition of use rights,and the standardization of data formats.It requires the coordination and cooperation of multiple agencies and departments,and the government needs to build a personal credit information system.China needs to play an active role in establishing a sound legal and regulatory system,formulating data collection and data usage standards,encouraging the development of market-based credit collection agencies,enriching the application scenarios of credit information products,promoting the education and popularization of credit culture,and gradually building a complete and consistent personal credit system in line with Chinese actual conditions.