Did Internet Finance Lower The Financing Cost

With the development of Internet and its penetration into financial industry,it could not be ignored that Internet finance has made great influence on the financial system.People expect that Internet finance can take advantage of lower transaction cost and information transparency so as to improve resource utilization efficiency.In addition,the financing problem of small enterprises that the traditional financial system could hardly solve is expected to be solved and the financing cost is expected to be lowered.This paper aimed at P2 P network lending,and analyzed the financing cost that P2 P platform could realize.In addition,the traditional financing channel were compared.Following this,the existing problems would be analyzed.Firstly,the ideal condition of Internet finance was analyzed.Through lowering the transaction cost and the degree of information asymmetry,the financial system will approach to the Walrasian general equilibrium so as to increase the efficiency for the resources allocation.Following this,15 representative P2 P network lending platforms were chosen so as to analyze the financing cost.At the same time,the traditional financing channels were introduced,including commercial bank,micro-credit company,private lending and capital market.Following this,it compared P2 P network lending and traditional financing.After considering the lenders' characters and the factor of risk return,it found that P2 P network can cover the subprime lenders that the commercial bank can't cover.However,the financing cost of P2 P platform did not show its advantage that the theory suggests it should.There is great difference between the current situation and the ideal situation.This paper put forward two main reasons.Firstly,a single Internet finance company is not able to realize the situation that data is shared by the whole society.In addition,it cannot improve the public credit system.Secondly,afore mentioned reason makes P2 P network lending platform fail to get rid of the shadow the traditional financial intermediary.Its cost advantage could not achieve the effect of “disintermediated”.Instead,it comes to be intermediated.At the same time,unlike the banking business,the P2 P network lending business is not regulated.Therefore,the risk and the social financing cost is both increased.Finally,aiming at the exiting problems,it combined the situation of oversea P2 P industry,it put forward some suggestions.Firstly,the industrial resource should be integrated and the industrial alliance should be set up.Therefore,the situation that data is shared by the whole society can be realized and the public credit system can be improved.In this way,the cost bright by information asymmetry can be lower.Secondly,P2 P network lending industry should be regulated timely.Its financial duty and position should be explicit.