What Is P2P?

P2P is the abbreviation of English peer to peer lending (or peer-to-peer), which means person-to-person (partner-to-partner). It is also called peer-to-peer network borrowing, which is a kind of private small loan mode that gathers small funds to lend to people in need of funds. It is a kind of Internet Finance (ITFIN) product. It belongs to private small loans, online credit platforms that use the Internet and mobile Internet technology, and related financial management behaviors and financial services.

p2p

(Internet finance peer-to-peer lending platform)

P2P ^[2]

I. Typical platform in pure online mode

The biggest feature of the pure online model is that both the borrower and the investor obtain it from non-ground channels such as the Internet and the telephone. Most of them are credit loans, and the amount of borrowing is small. This model is closer to the original ecological P2P lending model, focusing on data review and lending technology, focusing on user market segmentation, and focusing on small and intensive lending needs.

The platform emphasizes the investor's self-awareness of risk and protects investors to a certain extent through risk margin. Currently, the pure online model has certain limitations in its ability to expand its business, making business operations difficult. There are fewer domestic platforms using pure online models.

2. Typical platform for debt transfer model

The biggest feature of this model is that there is an intermediary between the borrower and the investor, which is a professional lender. In order to increase the speed of lending, professional lenders first use their own funds to lend, then transfer creditor's rights to investors, and use the funds collected to refinance the loans. Debt transfer models are more common in offline P2P lending platforms, so they have become synonymous with pure offline models.

Offline P2P platforms are often criticized for their large size and lack of transparent information. The use of wealth management products as packaging and packaged sales of creditor's rights is often considered suspected of building a funding pool. However, in fact, the financial models adopted by different pure offline platforms are not exactly the same, which is difficult to generalize.

Typical platform of guarantee / mortgage model

This model either introduces a third-party guarantee company to guarantee each loan, or requires the borrower to provide certain assets for collateral, so it is no longer a credit loan. If the guarantee company meets the requirements of compliance operations, the mortgaged assets are properly selected and easy to flow, and the risk of investors in this model is low. Especially for the mortgage model, due to its strong risk protection capability, there is room for comprehensive loan rates to fall.

However, due to the introduction of guarantees and mortgages, the process of lending business is longer, and the speed may be affected. In the guarantee model, the guarantee company bears all the risks of default, which is extremely important for the supervision of the guarantee company.

Fourth, O2O model typical platform

This model attracted a lot of attention in 2013. Its characteristics are that P2P lending platforms are mainly responsible for the maintenance of lending websites and the development of investors, while the borrowers are developed by offline branches. The process is to find borrowers through offline channels and recommend them to P2P lending platforms after an on-site review. After the platform reviews again, it will post the loan information on the website and accept bids from online investors.

Five, P2B model typical platform

This model also achieved great development in 2013, where B refers to Business, which is an enterprise. This is a model in which individuals provide loans to businesses. However, in actual operation, in order to avoid various risks caused by a large number of individuals lending to the same enterprise, the money is generally first released to the actual controller of the enterprise, and the actual controller then lends funds to the enterprise.

The characteristic of the P2B model is that the amount of a single loan is high, from millions to tens of millions to hundreds of millions. Generally, there is a guarantee provided by a guarantee company, and a counter-guarantee provided by an enterprise. At the same time, this model is no longer in line with the characteristics of small, micro, and intensive. It is difficult for investors to fully diversify their investments and diversify their risks. The relevant pressure is transferred to the platform, which places higher requirements on the platform's risk tolerance.

Six, P2F model typical platform

P2F refers to person-to-financialinstitution, a financing model for individuals to financial institutions. The financier is a formal banking, securities, insurance and other financial institutions. This model is a relatively new Internet financial model, with high credit, low risk, stable returns, and high liquidity. Because financial institutions have complete risk control measures, they can ensure the safety of funds and the stability of returns, and the security is much higher than that of ordinary P2P and P2B products.

In recent years, the P2P industry has exposed many shortcomings. Due to the inadequate domestic personal credit system and lagging regulatory policies, there have been frequent security incidents such as illegal fund-raising and fund running. It is against this background that some forward-looking platforms are seeking the next outlet of P2P. ^[14]

As of February 2016, the total number of P2P platforms nationwide was 3,944, but the cumulative number of problem platforms was 1,425. The types of incidents on the problem platforms were closed down, running, withdrawing difficulties, and economic investigation intervention. In recent months, the number of problematic platforms has decreased. ^{[twenty one]}

March 12, 2015, Governor of the Central Bank

In the industry's view, "compliance" is the biggest driving force for the online loan platform to lower its yield. Last month, the CBRC formally issued the "Guidelines for Deposit Management of Online Lending Funds". The new rules standardized the requirements for deposit conditions, account types, information interaction and disclosure, and liquidation of funds on the online loan platform. Accelerate the launch of P2P fund depository business. In fact, most current P2P platforms are still in the "burning money" stage, and are under deposit pressure to access depository for "compliance", but the costs and expenses arising from compliance need to be digested urgently.

According to the February 2017 Monthly Report of the P2P Online Lending Industry, in February this year, the comprehensive yield of the online lending industry was 9.51%, a decrease of 20 basis points from the previous month and a decrease of 235 basis points year-on-year. For the current mainstream comprehensive yield range of 8% to 12%, industry insiders believe that P2P yields will continue to decline in the future, and eventually stabilize between 6% and 8%. ^[30]