The Development Model And Risk Prevention Of Chinese P2P Lending

In China, the first P2P lending platform is PPdai which was established in August 2007. After 8 years of development, presently, Chinese P2P lending industry has formed a variety of operation models, and its source of capital is various, and the competition in this industry is so fierce. While, at the same time, the risk of P2P lending is enormous, because the absence of barriers to entry, regulatory authority, and industry standards. There are many barriers and difficulties for the development of P2P lending. So, it’s very important to understand the current situation, the kind of risks of this industry,and the find out effective solutions.Firstly, this paper reviewed the history of the emergence and development of the P2P lending. Then, we introduced several foreign and domestic P2P lending companies, all of which were typical in this industry, to display the operate mode of P2P lending platforms clearly. After that, using historical data, from a multi dimension, such as national and local, overall and individual, we carefully analyzed the market capacity, industry scale and product characteristics etc. Combined with statistical description and specific case studies, we carried out a detailed and in-depth analysis of P2P lending industry’s risk. Further more, according to the features of the risk, we subdivided the risk into credit risk, liquidity risk, information and technology risk and legal risk, and described them respectively. Finally, we put forward several concrete countermeasures to deal with these risks and to cope with the difficulties.