Cusp on the P2P industry

After experiencing a violent development in full swing, the current P2P industry may already be on the cusp.

At present, this is a non-regulated, non-admittance threshold, no industry norms and self-discipline industry. However, over the past year, there have been endless news on the collapse of various P2P platforms, runways and illegal fund-raising events. But on the other side, a lot of capital is still in the ascendant this beachhead, whether VC, PE or industrial capital, have gearing up to try in the P2P industry Nuggets.

"Because risk management does not address the current benefits and risk lag of returns, there will definitely be a number of platform failures in the future," one industry official told reporters. "However, the continuous involvement of capital shows that the development of P2P is the dominant trend."

There is no doubt that P2P industry, the tide of closure and investment wave, will speed up the differentiation of the entire industry, reshuffle and shape. How to find a suitable model and orientation in the current "militant warfare" to strike a balance between the expansion of scale and the safety of funds and to test all the P2P gold rushrs.

Credit problems

"Making P2P in China is not the same as in Europe and the United States. We do more than just P2P, but also include previous credit checking, rating, asset search and P2P platform building. NetEase financial CEO Sheng Jia said that due to all aspects of the pro-to-one, many P2P companies have a large staff.

In these sectors, the core obstacle lies in the credit system is not perfect. At the 2014 Shanghai New Finance Annual Conference and Internet Finance Bund Summit hosted by Shanghai New Financial Research Institute, Xie Ping, deputy general manager of China Investment Corporation, said that the underdeveloped credit system directly hampered the credit of P2P online credit Assessment, loan pricing and risk management, "a lot of things are not free and inaccessible." As a result, many P2P platforms have had to conduct offline due diligence. Credit costs are high, pushing up lending rates.

To point network as an example, the need for financing on its platform accounted for more than half the individuals, the remaining small and micro enterprises. Just on the line, the point of network users borrowing approval rate of only about 20%, the figure was even as low as 14%. After a cautious attempt, the company plans to gradually increase the approval rate to 30%.

If a small and micro business needs to apply for a loan, Dotcom will examine its daily business processes and view personal information about the boss, such as whether he owes a credit card, defaults, etc. By these data, the company tries Evaluate the risks of the business.

Typically, the point of financial network will be based on the level of income of enterprises or individuals, assets, the purpose of the loan, the duration of the loan, the amount of loans, etc., in a comprehensive scoring system scoring. Qualified small and micro enterprises, the annual loan interest rate of about 14% -15%, poor qualifications, the annual loan interest rate close to 17% -18%. For individuals, the annual loan interest rate given by Dianrong.com generally approaches or exceeds 20%

"Any one group or industry, in the event of a critical risk of bad debts, I can raise the interest rate of the industry next month, or even I can raise the interest rate of an industry on a weekly basis," point network CEO Guo Yuhang said. As a result, high interest rates, net of bad loans and a reasonable profit for the platform, will still yield substantial returns to investors. It is learned that every week, the company will conduct a comprehensive review of new overdue and bad debts occurred in the past week and a month, identify the cause of the problem, and reflect it in the new interest rate pricing.

Another P2P company pat loan, it will be based on the information submitted by users and their behavior on the network records, the customer is divided into several segments, and to develop the appropriate loan interest rates. Zhang Jun, a pat-loan CEO, said the company not only understands borrowers 'age, gender, marital status, income and liabilities, but also observes borrowers' comments on Sina Weibo, Qzone and other social networks. It is in the auction loan website browsing behavior. As a result, for a single applicant, pat loan can collect up to 400 or so characteristic information. On this basis, the user's situation is substituted into the corresponding loan model to calculate his credit rating.

Even so, point of network and pat loan still can not avoid the default and overdue platform. Some borrowers will return the loan after experiencing the collection, while others are suspected of deliberately cheating on the loan. Dian Rong network even found that some small and micro enterprises can also repay the loan on time, but also not to melt the loan online.

"It should be said that credit information system and the imperfection of the risk model, so we can not completely eliminate such default phenomenon." Pat Chang Dai CEO told reporters, "There are many areas of domestic data islands, such as marriage, real estate conditions, This has brought great inconvenience to P2P credit.In addition, the loan model lags behind the response to the risk, and such lag will also lead to the increase of risk. "

On this basis, the default information can not enter the central bank credit, but also P2P platform default rate and overdue rates are the main reasons. In view of Guo Yuhang, default costs low, in disguise indulgence of the behavior of the default.

"If default information in private offline lending and online lending can go back into the central bank credit system, the default will be significantly reduced." He said, "This will not only allow borrowers to raise their awareness of credit but also to banks, etc. Traditional financial institutions provide additional credit information. "

Confusion of supervision

Insiders pointed out that in the past many P2P companies to live moisture, is due to enjoy high interest rates, and the competition is relatively intense. For example, a P2P company gives investors an annualized interest rate of 12%, but it earns 60% of the annualized interest each month from borrowers. In this case, although the bad debt ratio sometimes up to 10%, but the high interest rates can still cover the bad debt ratio, P2P companies can continue to survive. In fact, as long as P2P companies give higher yields than the balance, there will be a large number of people buying P2P products.

However, the high-yield aura, the risk is gradually accumulated. In many cases, borrowers demand more than 12 months, but most investors are more willing to invest in short-term platform from the wind control point of view. As a result, some P2P platforms accumulate funds after the short deposit and long way to demobilize the funds mismatch, forming the so-called "pool of funds." Of these, there is often a huge liquidity risk brewing.

Further, some P2P platforms borrow new funds to meet maturity projects, and once the inflows are less than the outflow of funds, the platform game will come to an end.

Paradox is that as long as the platform has not yet occurred in funding, these P2P are still rapidly "siege slightly." In Mr. Xie's eyes, this phenomenon is not surprising - as there is a natural conflict between the business model of the Internet and the emphasis on security in financial institutions.

"The Internet emphasizes the advantages of pioneers, winners and marginal cost reduction, which makes the P2P platform inherently demand for traffic and scale expansion." He said that "in order to expand the scale, some sites have to take the principal guarantee, set the risk Reserve, docking financial management pool, which will reach the regulatory red line. "

In other words, a lot of P2P websites are in a "tangled" state. "Because a website can not scale to death, and want to do the scale without a credit data foundation, there is no need to guarantee the data foundation, Red line. "In Xie Ping's words, some P2P has" got rid of tangled "bigger, but there are a lot of P2P in the middle of an embarrassing interval. This situation will gradually improve through competition, but for now, how to effectively monitor this emerging industry has become a challenge for regulators and all practitioners.

In the view of Zhang Chenghui, director of the Institute of Finance under the State Council Development Research Center, the P2P platform is an intermediary in the final analysis. It uses Internet technology to analyze and manage risks, which are essentially different from the bank's management risk approach. Therefore, P2P can not be regulated by reference to the bank's model. There should be no leverage requirement for capital and loan-to-deposit ratios. In addition, P2P regulation is another focus of anti-fraud, anti-money laundering, P2P platform to prevent the use of capital pool for illegal operations.

"On this basis, it is very important to establish the industry's norms." She pointed out that this norms cover two aspects, one is to develop a national standard for the day-to-day management of P2P companies, such as how to calculate the default rate. Right now, each company has different calculation methods, resulting in these data can not truly reflect the operating conditions of each company. The second is to regulate the transparency of information.

Xie Ping said that the data foundation and external supervision are the preconditions for the healthy development of P2P net loans. The two are exacerbated and the data foundation is more important. In other words, when the data base is underdeveloped, the proportion of external regulation will be higher. The more robust your data base, the more relaxed external regulation.

"In the United Kingdom and the United States, the threshold for P2P companies is quite low, and US $ 20,000 or so can be registered," said Xie Ping. "The key to P2P regulation is regulation of information, not regulation of liquidity and capital adequacy. Publish shareholders, trading procedures and managers openly and back up transaction records in the future as a material for litigating or ex post punishment .P2P regulation is always based on data rather than funding thresholds. "

After all, the essence of P2P net loans is to provide a loan service through the internet. Its essence is not financial, income can only come from service projects, such as consulting management fees, transaction fees and so on. "Our existing regulatory theory is entirely set by the traditional institutions of silver security, does not apply to P2P.P2P is IT, we must from the information, IT, big data, search engines, full disclosure of these perspectives to consider P2P Regulatory, "he said.

To guarantee

Right now, due to the lack of social credit system, almost all domestic P2P companies have promised to guarantee the principal and interest, or difficult to attract investors. But in the United States, this form of guarantee does not exist.

It is reported that there are mainly three modes of domestic P2P guarantee: First, independent professional third-party financing guarantee agencies to provide security; Second, the platform to provide protection for all projects; Third, small loans, pawn shops, individuals and even other corporate guarantees.

However, these three models are not "perfect." Independence of third-party guarantee agencies often need to charge a lot of money, which undoubtedly increased the cost of financing the enterprise, reducing the rate of return; the platform itself does not set the access threshold, risk identification capabilities are also very limited. Once the platform is not profitable enough to make up for the risk of loss, it will cause systemic risk. In the third way, the same can not be convinced because individuals and businesses do not have a guaranteed qualification.

Under such circumstances, many platforms began to test the water "to guarantee."

Xu Jun, a consultant at Greater China Consulting Co., said that "de-guaranteeing" will be the future direction for domestic P2P websites because the platform plays the role of "information intermediary" and there is no need to assume liability for breach of contract nor is it necessary Mixed operation. Otherwise, the platform's profit model will be from the original risk-free service income into risky guarantee income, the development of stability will be greatly affected.

"At present, many P2P websites claim to be guarantors, in fact, fake guarantees. They simply do not have the capital to bear the risk of default." Xu Jin said, "P2P competitors are actually those credit card companies, which generally do not To track the user's revenue and expenditure, it will not ask for guarantees, but calculate the ratio of bad debts and bear some risk. "

On this basis, many in the industry believe that the real P2P transactions should be based on credit rating and credit analysis, rather than security.

It is said that by security for the P2P site "Lu Jin," is brewing "to guarantee." Luk Kwong Sang, chairman of the Board of Directors, has disclosed that the bad debt ratio of the Lujiazui P2P platform is only 1.5%. This is because the business has been carried out for a short time and a large number of loans have not yet reached the repayment cycle and are expected to rise in the future. Correspondingly, the pressure to pay the guarantee company increases. In addition, Ping An Group Chairman Ma Mingzhe said in June this year, Lu Jin will "gradually cancel the guarantee" in the future will be established within the risk of assets standards, the establishment of traders personal credit rating for investors to make judgments and choices.