Risk Control And Related Supervision Suggestions On P2P Lending Business

P2P lending as an Internet lending model is quite new. Using the network platform,people who have idle funds and those who have capital needs are matched. P2Plending is an effective complement to traditional financial system, it is financialinclusive.In recent years, the P2P lending business is growing very fast in domestic. As of theend of August, operating platform totaled1357, among many of which, annualturnover could reach several billions. With the rapid development, many problems ofthe industry also exposed: Some platform "disappeared" under the no-regulatoryenvironment; some had serious bad debts as no mature risk control method, and evenworse bankrupted. All these could bring loss to investors. Thus to establishment of acomprehensive and effective risk management system and regulatory mechanism isessential for P2P lending.In this paper, empirical analysis and normative analysis, qualitative analysis andquantitative analysis methods were used. A proper risk system for P2P lendingbusiness was studied based on analysis of features and risks of domestic typical P2Plending platforms. Also monitoring suggestion was raised.The main contents and conclusions of this study are as follows:1. Business model of main domestic P2P lending platform were analyzed Accordingto their characteristics, risk categories platforms face and the genetic mechanism weresummarized. Among risks platforms face, the credit risk is one of the major risks.2. Based on practical experience of domestic P2P lending business, a basic credit riskframework for P2P lending business was established, which contains riskmanagement issues and method before, during and after credit approval. Methodsbefore credit approval include establishment of access conditions, estimation theinformation-reality and qualification of applicant, while measures in and after creditapproval are mostly close monitoring on portfolio in case any early warning could befound and risks controlled.3. Referred to foreign P2P lending monitoring experiences, objectives and suggestionof domestic P2P lending supervision were given considering the real businesssituation, including self-discipline and self-examination of industry, laws andregulations, improvement of credit information system and purification market.