Online finance is a much-released blue sea

I: The interest rate of the bank is 5%? My colleague New wisdom: 5% is also high. Me: Damn, what's the good interest rate of 12%? ... ... Well, yes, the above dialogue reflects me as a moonlight, month through users, plus a financial small white

Me: "Is there a 5% interest rate on the bank?" ”

My colleague New wisdom: "5% is also high." ”

Me: "Damn, what's a good interest rate for 12%?" ...”

... Well, yes, the above dialogue reflects me as a moonlight, month through users, plus a wealth of small white users of the entire financial products to understand the extent.

But in the absence of such a knowledge of specific financial product information, the online financial entrepreneurs and investors I've come into contact with have more than once told me the big story: "Online finance is a blue sea that is far from being released ..." What is the market? Do you think it is advantageous in the first month of online turnover breakthrough 10 million, 2.5 months breakthrough 26 million can you explain some of the problems? In addition, the above 5% and 12% examples also want to illustrate a problem: if the advantage of the provision is about 12% of fixed-year interest rate, to ensure that your annual yield of 12%, you still want to deposit money into the bank?

Well, the benefit is not so mysterious as I said, it is a peer-to-peer online lending platform. On the face of it, it is no different from a website for everyone who lends and pats a loan: It also targets small micro-enterprises and individuals, as well as microfinance. Investors look at the various types of loans through the site, and then direct the money to the reliable borrower, and then, can be based on the duration of the loan to receive part of the principal and interest.

But the difference between making a loan and taking a loan is all of its borrowers are directly recommended by offline microfinance companies, and so the risk of bad debts is transferred directly to the small lenders – if the borrower does not have the money, the small lender is responsible for repaying all the principal and interest. Theoretically, investors are a steady earner, which is tantamount to depositing money into the online bank on a regular basis.

So, you see, everyone lends and pats loans online directly to the borrower and the investor, while the advantage is the choice to butt the investors and microfinance companies. "Microfinance companies under the online development of borrowers, to conduct the first credit audit and provide 100% guarantee, we after the final recommendation to the investment." "The founder, Liu Yannan, who worked at the investment bank Merrill Lynch, said. So, what they do is the typical O2O, more specifically the C2B,B2C model. These letters represent investors, the benefit net, the small loan company, and the borrower, while the middle two B explains that it differs from other Peer-to-peer websites.

Why are there differences in this pattern? Liu Yannan explained that, from a big point of view, China is a lack of credit system of the country, which fundamentally determines that credit must be a labor-intensive industry, and the audit mechanism in the pure reliance on the line can not be completed (guaranteed). For example, if you're a store-shop chief who wants to borrow money, how can you prove your real business online? It is impossible for others to go to the shop to visit.

So in his eyes, this also leads to such peer-to-peer lending sites will have a low potential default rate. In fact, "the bank's bad debt rate is 1%." "Thus Liu Yannan does not believe that everyone loans 2% of the risk pool can be in the event of bad debts to ensure the interests of all investors-the reality is that, if there is bad debts, the practice of everyone is the first to get the money, the risk of the pool to the end, and the racket loan simply let the investors By contrast, the benefit will be to the small loan company to the end.

However, you may wonder, as a lender of its own, that is, the investors, offline small lenders why to give favorable referral customers, but also to the benefit of the security party to bear bad debts, where is the momentum? The problem can be seen from three. 1. In a big market environment, China has 48 million of small micro-enterprises, and only 300,000 of the loans available, as evidenced by supply and demand, which can actually explain why all kinds of peer-to-peer lending websites have sprung up. So, the small loan company can do the customer after all limited, do not why not recommend? 2. From the point of view of the cost of capital, the money originally used for lending can also be invested in other higher-yielding projects; 3. According to Liu Yannan, the risk-control mechanism offered is reliable. To a favorable referral client, a small loan company may receive three parts of the income, namely a favourable recommendation fee, a fixed intermediary fee provided by the borrower, and a guarantee fee based on the credit rating. The risk of a buffer of 7% to 8% should be able to withstand the risk of repayment of the principal due to bad debts.

Therefore, although advantageous also does is the Peer-to-peer, but Liu Yannan oneself to generalize this product the characteristic is "the high income, the security degree is also high". Of course, the control of risk also means the contraction of the proceeds themselves. The benefit of this 12%-year rate is the reference FICO, that is, the United States personal consumption credit evaluation company developed by the personal credit rating of the conversion, in contrast, the annual interest rate for everyone to borrow as high as 18%-19%, while the racket loan can reach 16%-20%.

In addition, two B is added to the peer-to-peer, which inevitably increases the cost of human resources, limits the speed and freedom of trade, and is beneficial to the current partnership between only three companies in Shenzhen and a small loan company in Jiangsu, with close to 600 effective users involved in the transaction. Because of the lack of the concept of numbers, I questioned Liu Yan South in the dialogue, "your line speed is not fast oh." "But he told me that these small lenders are also the annual lending amount of 20-30 billion:" We only do this very long chain of the "distribution" part of the microfinance companies to do "manufacturing", we think it is possible to quickly replicate, scale expansion. “

said that returnees will not be acclimatized to entrepreneurship, in China do not understand the domestic market environment is easy to puny. However, light from the favorable first month and the last few months of turnover, Liu Yan South is playing a beautiful start. Speaking of why to do such a product, in addition to the previous investment banking background, Liu Yannan told me, because the financing is just needed--China's open financial products line of turnover of 7 trillion a year. and care of the market, the current market of existing financial products include bank deposits, stable but the yield is very low; funds, stocks, fluctuations in earnings, risk is not controlled, and the professional threshold is higher, do not understand the fund, stocks can not play; In addition, there are trust products, but basically are the starting point of 501 million, ordinary youth can not afford to play.

Therefore, small, based on peer-to-peer lending, with fixed Income management products should be very suitable for this age group of white-collar users. At present, the beneficial network has formed a 21-person team, three co-founder responsible for channel and partner establishment, network marketing and product promotion, product development and user experience optimization three parts. They were actually founded last June in the company, during which it took 9-10 months to develop the corresponding backstage system, to expand the offline relationship, and then on the February 25 of this year officially on the line.

When it comes to the future of online finance, Liu Yan South himself made a metaphor, the internet was originally as a tool of production, mainly to do timely information transmission and the structural presentation of information, more reflects the internet itself industry characteristics, and with the development of the Internet, it has gradually evolved into a living tool, It's a big trend to make it easy for the guys to spend and buy. In the case of finance, many of China's distribution links are opaque--the financial side is digital, closer to the Internet in character, and therefore easier to implement via the Internet.

Well, that's right, but at the end of the story, I'd like to revisit the text at the beginning of the article. What does this example mean? Well, what this example suggests is that, as a 24-year-old kid's shoe, I'm not more than a light-years away from my target client in the 25-35 age group ...

It can be said that in the interests of this matter, in addition to legal and policy risks, the other has to consider is the user education and product promotion-please, 12% time deposit of online banking do you believe it? (OK, weak and weak to say I believe in addition, as Liu Yanbei himself said, users scattered online, they will promote their own posts to those investments, financial management of vertical channels is still far from enough, most of the coverage is some often visit the high-end customers. and beneficial to the actual target customers, nothing more than me a little bit of small white customers, is not it ...

PostScript: After the report Liu Yannan told me that UV is up 5 times times, OK, in fact, I used to ... In response to micro-blog and the article on the advantages of the risk of the control, 12% of how the proceeds of capital preservation, and whether there are hidden dangers of illegal fund-raising and other issues due to the length of the problem I do not explain, interested readers can see Liu Yannan in the microblogging reply ha.