Study On Credit Risk Measurement For The Business Borrowers Of P2P Lending In China

In our country, the first P2 P lending company was found in 2007. P2 P lending have received considerable attentions and applications in a couple of short years due to its advantages such as covenant-lite,high-efficiency and wide-coverage. Especially in recent years, along with the popularization and innovation development of internet and computer technology, P2 P lending is booming all around our country in the context of constant financial market reform and development. According to statistics released by “Wangdaizhijia”, there were 1575 P2 P lending companies in China until the end of 2014.The turnover reached 252.8 billion in 2014, as usage continues to grow in the largest P2 P market in the world. They play an active and important role in promoting the development of lending markets in our country.However, as P2 P lending’s prosperity grows, so do its industries risk. Negative news about P2 P lending companies close-down or run-away had been reported so frequently since 2013, and some news media even call this phenomenon as ”runaway trend”. According to statistics released by “Wangdaizhijia”, there were 256 trouble P2 P lending companies in the year of 2014, which was 2.78 times compared to the end of 2013. In the absence of exterior supervision and trade/industry standards, the entire P2 P lending industry faces the serious challenge of risk. Beside the big risk of illegal fund-raising, credit risk is the most serious problem to the developmental of P2 P lending. The effective control of credit risk is crucial for P2 P lending to realize steady development in our country.Therefore, how to measure the credit risk accurately is an important issue in the present.This thesis is intended to develop a model for the measurement of credit risks and put forward some constructive suggestions. The thesis analyzed the current situation of Chinese P2 P Lending at first, and pointed out the considerable success and some problems with credit risk management in recent years. Secondly, by using a lot of method, we analyzed the basic structure and theoretical basis of Z-score model, KMV model, Credit Metrics, Credit Portfolio View and Credit Risk+ model. Through comparative, we at last decided to apply Z-score model to the credit risk measurement of P2 P lending. Finally, accorded to the famous Z-score model and the characteristics of P2 P lending business and its business borrowers’ credit risk, we introduced the non-financial factors and the intended purpose of loans, and established the ￠PZ - model, which is a more scientific and targeted model.