Research On Loan-default Risk Management Of Online Peer-to-Peer Lending Platforms

Against the backdrop of financial openness,diversification and internet maturity,the emerging online peer-to-peer(P2P)lending platforms have come under the spotlight and mushroomed across China.As of February 2016,there are more than 2,300 online P2 P lending platforms operating in China and total volume of transactions is expected to exceed 2 trillion Yuan by 2016.Favored by private borrowers and lenders,online P2 P lending has attracted wide public attention and become an important channel for private lending.However,in the middle of rapid growth,Ponzi scheme,run-away bosses and bankruptcy have seriously damaged the integrity of this industry.This paper studies how to manage loan-default risk from the perspective of online P2 P lending platforms.The author first summarizes existing research findings and explains the theoretical rationale and influential factors for loan-default based on asymmetric information theory.On the basis of introducing the situation of loan-defaults for China's online lending platforms and the way of dealing with them,the author take hudai for example,introduce the risk management measures and the current state of loan defaults about hudai.In combination with case analysis and linear regression analysis of Hudai's loan default data,this paper studies the dependence between default and influence factor like mortage,loan-rate,loan-time and credit rating.After these studies,the author found that the credit checks of loanee before the loan and the risk management of long time loan are the essences of loan-default risk management of online peer-to-peer lending platforms.Based on previous research findings,asymmetric information theory and linear regression analysis,this paper puts three constructive suggestions for managing loan-default risk,which include improving credit review system based on big data,being careful for long time loan,promoting petty cash system and advocating fund depository.