Studies On The Operational Mode Of Online Peer To Peer Lending In China

Online peer to peer lending is a new way of financing with the development of internet and private lending.It refers to providing an information platform to complete lending by internet.In this way, individuals can charge interest and provide small loans to others.This mode does not rely on traditional bank as financing channel.The lenders and the borrowers are both ordinary individuals, and the online lending platform can be regarded as an information intermediary can improve transaction efficiently.Online P2 P lending originated from the United Kingdom.In 2007,this mode was introduced to China by Ppdai,and currently there are more than 1,500 online lending platforms.However online P2 P lending industry have many problems in the developmental process,such as the platform escaping, cheating, money-strand breaking,etc.Even thought it appeared 275 problematic online P2 P platforms only in 2014,P2 P industry is an important supplement to traditional finance.The healthy development of the industry is indeed so important that,lenders and regulators are very concerned about.According to comparison and analysis for operation mode of domestic online P2 P lending platforms,this paper explains their advantages and disadvantages, and propose effective recommendations.This paper has five chapters: Introduction;The overview of P2 P micro-credit industry development in China;The analyze of different examples of operation modes of online P2 P lending platforms;The comparison of different operation modes;The conclusions and countermeasures.Case studies and comparative analysis which is the focus of this paper.This paper selects four typical online P2 P lending platforms:Ppdai,Renrendai,Lufax and Yixin..The third chapter analyzes P2 P platform operation mode from aspects of company profiles, operational processes, the main business, profit model and risk control.The fourth chapter compares the four platforms according to the different aspect of operation features, risk, popularity, volume and income of platform which have analyzed in chapter three.Based on the comparison:pure online and intermediary P2 P lending platform has low operational risk,but its investors face high risk,and this kind of platform’s trading scale is difficult to break through;the self guaranteed online P2 P lending platform can get a larger volume because its own guarantee system increases the investor’s risk appetite,However the development of platform is restricted by territory in a certain degree because site visits are often required in terms of risk control;the introduced a third-party guarantee mechanism will separate capital risk from operational risk,this mode allows investors to get a credit guarantee,it is a big challenge that whether the third partyguarantee can support the needs of the development of business with the continuous expansion of the platform.the platform also faces the risk of regulatory compliance;credit transfer mode P2 P platform can take the initiative to conduct business, it can also achieve platform scale rapid expansion.But the operation process will produce a capital pool and face the compliance risk,so operational risk of such P2 P platform is higher.On the basis of the previous text, this paper points out some problems of the current online P2 P lending platform during the process of operation in domestic market, such as lack of legal supervision, imperfection of the credit rating system, the internal credit risk of platform, lack of security of capital platform,the network security risk, etc.At last,the countermeasures is put forwarded to solve these problems.