Lu Jin's bad debts are a peer-to-peer business model or a confidence question

Recently, Lu Jin was the first financial, Sina technology and other media reported that 250 million overdue bad debts. Lu Jin's Ping An international commercial factoring (Tianjin) Co., Ltd. (hereinafter called Ping An Shangbao) accumulated nearly 400 million borrowings, of which with Shaanxi Gold Ziyang Agricultural Technology Group Co., Ltd., 250 million of the loan has expired, Ping An insurance company has to activate the capital pool repayment of the investor principal and interest.

Sina Science and Technology also reported that the grand public international credit rating group on 12th issued a notice will be included in the Internet financial blacklist Lu Jin, said that the existence of the platform to pay a large amount of capital changes, the platform debt information seriously asymmetric and suspected related to security issues.

Lu Jin clarified that the project was backed up by a third party and that investors ' rights were completely unaffected, and said the project had nothing to do with Lu Jin's peer-to-peer business. To date, no Lu Jin users have suffered any investment losses. Industry insiders also said that the international ratings of the data sources are not clear, so the credibility of the rating is to be considered.

According to the Sohu Securities report, in 2014 China has at least 183 Peer-to-peer platforms running or closing. and Lu Jin and the letter of such a large scale and wind control to do a better platform has been playing the role of industry benchmarking. 36 Krypton has reported that Lu Jin's valuation rumors have amounted to tens of billions of dollars, but also an interview with the senior vice president of the letter, large data leader Joyce to talk about the letter of the Big Data Control system, the latter said:

The traditional line credit technology restricts the data source and the thought of the evaluation, and the technology, tools and thinking of Internet have the possibility to change all these.

However, the recent Lu Jin of bad debts has made people wonder whether such a large-scale platform is unreliable. If the financial institutions such as Lu Jin are unable to deal with the bad debts caused by the Peer-to-peer model, the entire capital market will have doubts about the prospects of the domestic peer-to-peer industry.

Lu Jin has repeatedly clarified that bad debts have nothing to do with peer-to-peer business, but the public interest and investor panic that has been raised by the incident have also shown that society is now jittery to peer-to-peer, and that information directed at investors is asymmetric.

Increasing transparency and strengthening regulation may be the best way to deal with this information asymmetry, in the end, what is the details of the "Lu Jin of the platform's paid-in contributions, the serious asymmetry of the information on the platform debt, and the related collateral"?

It should also educate investors that any gain means risk, after all, Peer-to-peer is an emerging industry. In China, many peer-to-peer investors are not prepared for risk while receiving more generous returns.