An Empirical Study On The Relationship Between Reputation And Interest Rate In P2P Platform

P2P Internet lending is one of the representative types of internet inclusive finance development.Since its rise in China in 2007,it has attracted more and more attention due to its low threshold,wide audience,and rapid financing.The emergence and prosperity of the P2 P industry has its specific investment and financing market background.Before the rise of P2 P network lending,traditional financing methods such as banking and securities have the characteristics of high thresholds,cumbersome approval processes,and lengthy financing processes.Under this kind of financial environment,“financial suppression” has been generated for ordinary individual microfinancers.The P2 P financing model breaks the traditional financing model,interpersonal and geographical restrictions,greatly promotes the flow of social funds and improves the utilization of idle funds.Compared with the developed capitalist countries,China still has much room for improvement in its credit reporting mechanism and supervision.Considering that the P2 P industry is a better investment channel for the residents' idle funds,the society has more idle funds,and the parties involved in P2 P lending are basically small and medium-sized investors and non-specialized investment institutions such as small and micro enterprises,lacking professional and systematic financial knowledge,and risks.The awareness of prevention is not high,and it is difficult to make choices in the selection of platforms and investment and financing projects.This article takes reputation as one of the criteria for platform selection and describes reputation in terms of volume,popularity,transparency,user experience,decentralization,compliance,branding,and advertising eight aspects that reflect the characters of the P2 P platform.The importance of each evaluation index is weighted,and the reputation score of the P2 P platform is summarized in the form of percentage points.The borrowers and lenders are most concerned about the interest rate of borrowings and the rate of return on investment in the lending process.Therefore,this paper introduces interest rates to conduct research and analyzes macro and micro factors that influence the pricing of P2 P platforms.This paper studies the relationship between reputation and interest rate.According to the theoretical research,the author concludes that there is a negative correlation between the two.Finally,an empirical study is conducted based on the data collected from the platform.The results of the study indicate that there is a significant correlation between reputation and interest rates.For every point increase in the reputation index based on the percentage point score,the average interest rate of the platform is reduced by 0.11%.The reputation model in this article can also be used as a research model for other issues involving P2 P platforms,providing some reference for both parties involved in P2 P investment and financing.