The building block box is one of the emerging domestic peer-to-peer boom

Guide: The building block box is one of the emerging domestic peer-to-peer boom. Unlike other Peer-to-peer, the Block box chooses to start with financial data, and then formally cut into the peer-to-peer after accumulating certain data.

Start with the data

Dong Jun, a financial-industry-born company, had 5 years of bond trading and structured investment products in New York, before creating a "building block box". 2005, Dong Jun returned to his hometown of Yunnan, founded the "Yunnan Zhong Ming Financing Guarantee Co., Ltd." (hereinafter referred to as "China-Ming Guarantee").

In Peer-to-peer Industries, the founders of traditional financial origins are not uncommon, such as one of the founders of Xin, one of the founders of the Liu Yannan. and Dong Jun more than 10 years of traditional financial experience, let him accumulate portfolio loan risk and credit analysis experience. This has become one of the advantages of his later management of the building block box.

and specifically for small and medium-sized enterprises financing to provide security services in the Ming Guarantee, let Dong Jun see the domestic small and medium-sized enterprises financing strong demand and financing difficulties between the contradictions-this became his direct power into the peer-to-peer. "Only 3% of small businesses in the country can get bank loans. "Around 2011, Dong Jun had a peer-to-peer idea.

But the Dong Jun without Internet experience did not create the building block box directly, but chose a "detour". At that time, he thought, do not open the data, must be large-scale access to small and medium-sized enterprises of high-quality credit data, in order to truly understand the characteristics of the financing needs of these enterprises and risk control. Based on this consideration, Dong Jun set up the financial data and Analysis website "Enterprise Le Hui" in early 2012.

The main business of the company is to help bank clients analyze loan applicants ' data and conduct due diligence. The work helped them data on about 700 small and medium-sized enterprises. Dong Jun said that 700 in the country to see is a very small data, the company will not take the bank customer data to do specific business or marketing, but only as data reference. "We are mainly interested in learning how to manage due diligence in small and medium sized enterprises in bulk." Dong Jun said.

2.0 Trading: Block box

As mentioned above, Dong Jun is only the first step of the ―20, and his vision is "1.0 data trading ―3.0 Large data platform." This August, the building block box officially on the line, and this is Dong Jun really into the Peer-to-peer node, that is, the second step "2.0 transactions."

On line less than 4 months, the building block box Matchmaking financing transaction is 59 million, brings the income to the investor about 3.3 million. Compared with the racket loan, everyone credit and other competitors, the building block box belongs to just starting. And the company has not yet to finance, is in contact with institutional investors stage.

Dong Jun has set a relatively conservative but more robust path for building blocks, compared with the nearly 20% per cent of the other peer-to-peer claims of high yields: choosing projects with relatively lower yields and more manageable risks. On the platform of the building block box, the annual yield of most items is about 10%-12%, lower than most of the competitors.

"Small-risk projects are willing to take on a low interest rate, and we are willing to compromise on yields to reduce risk." According to Dong Jun, the building block box on the project pass rate is only about 30%. That is to say, about 7 of the 10 projects that launch applications on the Block box will be rejected during the audit process and cannot be financed online.

The way the building blocks are profitable is similar to that of most peer-to-peer companies, that is, they do not charge a fee to the financier only. and in order to guarantee the risk of bad debts, the building block box will require the financing of the applicant to pay the loan amount of about 3% of the margin, deposit formation of the pool of funds can be in some projects in the event of bad debts in advance to compensate investors. This is also a block box to prevent platform systemic risk of a move.

At this stage, the Block box also requires each project has a guarantee company to do the guarantee, Dong Jun in the Ming guarantee also in this link to the left and right. "We now want to introduce other guarantee companies in a market-based way," he said. In the future, not every project needs to be secured, as long as investors are willing to accept projects that are not guaranteed by the guarantee company. Dong Jun explains.

Next year or usher in regulatory policy

Since August this year, including the central bank, local governments have been on the Internet financial Research, which Peer-to-peer has become the focus of investigation. At present, most of the peer-to-peer enterprises in China only have an Internet Information Service licence, and there is no special financial business license. The temporary absence of regulation allows the industry to grow rapidly while also making potential irregularities and risks a living space.

Dong Jun that the domestic peer-to-peer this year about 20.03 trillion of the size of the future space is very large. At present, local government's attitude towards internet finance tends to be tolerant and open, which is a favorable environment for the industry. In the end of the year or early next year, there may be a specific Internet financial regulatory policy.

According to Dong Jun's judgment, the regulation policy will mainly cover three aspects of licence, capital flow and information disclosure. In his view, peer-to-peer licences are one of the barriers that the government is sure to set up. In addition, in order to standardize the Peer-to-peer platform behavior and prevent illegal fund-raising, the policy should require peer-to-peer companies to set up a regulatory account, all the funds of investors can only enter the regulatory account and not the Peer-to-peer platform to meddle, to prevent the platform to divert funds for his use. Finally, regulators should ask peer-to-peer companies to be as transparent as possible about disclosure.