The Case Study Of Jieying 2018-2 Personal Consumer Credit Asset Securitization

In recent years,the rapid development of China’s consumer financial market has formed a situation dominated by banks,licensed consumer financial institutions and Internet financial platforms.The establishment of a licensed consumer finance company has played an important role in promoting consumption,improving financial services and building inclusive finance.However,since consumer financial companies cannot directly collect reserves from the public,their funding sources are limited,and their development is more constrained.As an important financing method,asset securitization has the advantages of revitalizing stock assets and improving the efficiency of capital allocation.The size of consumer loans is small,and the characteristics of decentralization and homogeneity can best meet the requirements of asset securitization.As the government issued documents to encourage consumer finance companies to adopt multiple financing methods,more and more consumer finance companies began to raise funds through asset securitization to provide them with a continuous and stable source of funds.Based on this,this article selects the first securitization product that uses a cycle purchase structure among consumer finance companies-"Jieying 2018 Phase II Personal Consumer Loan Asset Supported Securities" as an example to study the issuance and structural design of this product.This product solves the problem of outstanding maturity mismatch of personal consumer credit securitization products in the past,and is typical and representative.This article first introduces the relevant concepts and participants of China’s consumer finance and asset securitization,and explains the principles of securitization.Secondly,in the case introduction part,we will analyze the cause of the action of Jieying 2018-2 ABS from the perspective of the development and financing status of Jiexin’s financial business,and briefly introduce the issuance and transaction process of this period of securities.Then the analysis part starts with basic asset quality and transaction structure,analyzes basic asset quality such as loan contract characteristics,borrower characteristics,asset transparency,and analyzes transaction structure design such as circular purchase structure,credit enhancement measures,cash flow distribution mechanism,etc.Finally,the effect of this period of securities issuance is evaluated,the advantages and disadvantages of this period of securities are pointed out,and suggestions for improvement are provided to provide a reference for the subsequent product issuance.Through analysis,this paper finds that: Jieying 2018-2 ABS product is issued more successfully,the pooled assets are small and homogeneous,and the borrower has the corresponding repayment ability;the single loan term is short,but the design of the circular purchase structure eliminates the security period.The problem of matching;the design effect of various internal credit enhancement measures is remarkable,which greatly improves the credit rating of priority securities.In terms of the issuance effect,this issuance has reduced financing costs and improved asset and liability management,and has a good demonstration effect.In view of the problems of high default rate,incomplete transfer of risk compensation and low transparency of assets,it is recommended that issuers strengthen the popularization of personal financial knowledge,improve the construction of risk control systems and credit reporting systems to further reduce the incidence of defaults;counteract bankruptcy risks through the transfer of real assets through risk and rewards;actively use blockchain and other technologies to reduce information asymmetry,strengthen information disclosure,and improve the efficiency and market efficiency of securitization.