P2P Credit Risk Management From The Perspective Of Social Capital

Internet technology and information technology connect the Internet to finance.The financing,payment,and guarantee of funds are transferred gradually from offline to online.There are many forms of online financial innovation: crowdfunding,Internet finance,big data e-commerce,etc.From the foundation of China's first Internet lending platform-PPDAI to the foundation of the network borrowing regulation rules in 2016,there passed for ten years.By 2017,there were 5,882 P2P lending platforms in China,with a total transaction value of 3854426 million yuan.P2P lending is a concept at first,but now,it is a national investment method.The borrower who has high credit level can gets the borrowing easier and pay for lower interest rate.The P2P industry is growing fast,but the service for P2P platform is incomplete.It is also hard to prevent borrowers from defaulting.The asymmetry of information makes it difficult for investors to assess borrowers' ability to repay.P2P platforms provide community BBS for discussion,it also provides a new thinking of risk control: introduce social capital into the credit rating system and the results of the evaluation are provided to investors to reduce the investment errors caused by asymmetric information.This paper studies the credit risk of borrowers from the perspective of platform credit risk.Collecting several groups of experimental data from PPDAI,and refer to the personal risk evaluation system of commercial bank to select index.Then pick out some social capital substitution variables.Through data processing,classification and quantitative method,inputting the index into the Logistic model and get a new borrowers default risk evaluation model.The innovation of this article is to introduce the social capital variable to predict the risk of the borrower defaulting and it found that the positive performance of borrowers in the BBS could increase their social capital,reducing the difficulty of founding.This paper also provides some suggestions for investors,platform and government department for the high speed development of P2P industry.