Research On The Financing Choice Of Rural Low-income People In The Background Of Internet Banking

Rural low-income population, who living in the urban fringe and rural areas, always bear the discrimination of traditional financial institutions. While the question of poor lending approach and high threshold is the fundamental cause in credit lending for the low-income groups to help themselves out of poverty.The innovation of Internet banking may become a new way to solve this problem. P2P network lending and group lending uses social sanction mechanism to make up for the disadvantages of traditional financial institutions in the information collection and collateral assessment, thus they are expected to provide fair financing opportunities for low-income groups. This paper discusses the borrowing choose and gains from the perspective of low-income group by analyzing the constrain system and approaches of these two models and the mechanism of social sanction.This paper uses the repayment mechanism as model basis, from the perspective of rural low-income groups to discuss the loan proceeds and borrowing options. As a conclusion, we believe that an integrated social sanction system can improve the expected return of the group lending participants. Moreover, P2P network lending may lead to higher borrowing benefits for the low-income groups than group lending.