P2P lending industry in China

P2P lending industry in China

Hang Yin

International Journal of Industrial and Business Management

A judgmental sampling method is used to analyze the business models existing in China’s P2P lending market. To achieve this goal, this research selects the top 100 platforms based on outstanding loan amount to find out their business processes. After observing these platforms’ official websites, this research divides all business models into three categories with the asset side, platform side, and liability side. At the asset side, 78% of sample platforms implement business of guaranteed loans, 59% offer risk reserve service on credit loans, 14% provide pure credit loans, and 6% supply insurance loans. There are also 13% of sample platforms refer to the transfer of creditor rights from other financial institutions. For the platform side, P2P lending businesses are presented by the time order of before lending, during lending, and after lending. And at the liability side, there are individual or institutional investors. In the last, this research uses the qualitative method to identify risks come along with corresponding business models. These risks are mainly caused by P2P lending stakeholders’ willingness or abilities. Among all the risks, platform side risks are most prominent.

Keywords: P2P, business models, risks, regulation

Free Full-text PDF

How to cite this article:
Hang Yin. P2P lending industry in China. International Journal of Industrial and Business Management, 2017; 1:4. DOI:10.28933/ijibm-2017-03-2801


1. Bloomberg. (2015). China Cuts Interest Rates as Policy Divergence With US Widens. Retrieved 22 July, 2016, from http://www.bloomberg.com/news/articles/2015-10-23/china-cuts-interest-rates-reserve-ratios-to-counter-slowdown
2. Cambridge. (2016). THE 2015 UK ALTERNATIVE FINANCE INDUSTRY REPORT. Retrieved 23 July, 2016, from https://www.jbs.cam.ac.uk/fileadmin/user_upload/research/centres/alternative-finance/downloads/2015-uk-alternative-finance-industry-report.pdf
3. Cambridge. (2016). THE AMERICAS ALTERNATIVE FINANCE BENCHMARKING REPORT. Retrieved 23 July, 2016, from https://www.jbs.cam.ac.uk/fileadmin/user_upload/research/centres/alternative-finance/downloads/2016-americas-alternative-finance-benchmarking-report.pdf
4. FCA. (2014). The FCA’s regulatory approach to crowdfunding over the internet, and the promotion of non-readily realisable securities by other media. Retrieved 21 July, 2016, from http://www.fca.org.uk/static/documents/policy-statements/ps14-04.pdf
5. Lingyi. (2015). China’s P2P lending service industry white paper. Beijing: Oriental Press.
6. NPC. (1995). Guaranty Law of the People’s Republic of China. Retrieved 22 July, 2016, from http://www.npc.gov.cn/englishnpc/Law/2007-12/12/content_1383719.htm
7. NPC. (1999). Contract Law of the People’s Republic of China. Retrieved 23 July, 2016, from http://www.npc.gov.cn/englishnpc/Law/2007-12/11/content_1383564.htm
8. NPC. (2004). Securities Law of the People’s Republic of China. Retrieved 24 July, 2016, from http://www.npc.gov.cn/englishnpc/Law/2007-12/11/content_1383569.htm

9. P2PEye. (2015). 2015 China’s P2P lending industry annual report. Retrieved 21 July, 2016, from http://www.p2peye.com/topic-nk2015.html

10. Reuters. (2014). UPDATE 1-In China, troubled shadow bank product tests no-default policy. Retrieved 22 July, 2016, from http://in.reuters.com/article/china-icbc-idINL3N0KQ2L520140116
11. Reuters. (2016). China police arrest 21 over $7.6 bln online financial scam. Retrieved 21 July, 2016, from http://www.reuters.com/article/china-fraud-ezubao-arrest-idUSKCN0VA1E5
12. Slattery, P. (2013). Square pegs in a round hole: SEC regulation of online peer-to-peer lending and the CFPB alternative. Yale J. on Reg., 30, 233.
13. Thomas, Z. (2015). Institutional investors eye P2P lending platforms. International Financial Law Review, Retrieved from http://elib.tcd.ie/login?url=http://search.proquest.com/docview/1697165553?accountid=14404
14. WDZJ. (2015). 2015 China’s P2P lending industry annual report. Retrieved 21 July, 2016, from http://wdzjosscdn.oss-cn-hangzhou.aliyuncs.com/nianbao/2015nianbao.pdf
15. WDZJ. (2016). 2016 China’s P2P lending industry semiannual report. Retrieved 22 July, 2016, from http://www.wdzj.com/news/baogao/30277-all.html
16. WDZJ. (2016). P2P lending platform data. Retrieved 25 July, 2016, from http://shuju.wdzj.com/platdata-1.html

Terms of Use/Privacy Policy/ Disclaimer/ Other Policies:
You agree that by using our site, you have read, understood, and agreed to be bound by all of our terms of use/privacy policy/ disclaimer/ other policies (click here for details).

This work and its PDF file(s) are licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.