When consumer finance encounters the Internet

Consumer finance is a financial service that provides consumer loans to all strata of consumers, consumer finance in a broad sense includes housing loans, auto consumption loans, consumer loans for durable goods and tourism loans, and consumer finance in the narrow sense does not include housing loans and car consumption loans, Mainly consumer loans such as durable goods and tourism loans. The development of consumer finance in China began at the end of last century, after the Asian financial crisis in 1997, China's consumer finance rapid development, consumer loan scale expanded year after 1997, consumer loans balance only 17.2 billion yuan, November 2014 consumer loan balance of 15.1 trillion yuan. Housing loans and car consumption loans accounted for about 75% of China's consumer loans, and general consumption loans accounted for about 25%. This paper studies the consumer finance is narrowly defined consumer finance, excluding housing and car loans, mainly personal or family general consumer loans. The bank is the main provider of consumer financial services, the consumer finance company established in 2010 and the rapid development of microfinance companies enrich the providers of consumer financial services, the 2014 Electronic Business platform and other Internet companies and Peer-to-peer network loans to join, to a certain extent, change the development pattern of the consumer finance industry.

The development environment of consumer finance industry

Since China's reform and opening-up, the rapid economic development, the more the world's second largest economy, the role of finance in economic development has been strengthened, financial sub-industry development has been rich, consumer finance as a new member of the financial industry has just started. At present, China's economic development enters a new stage, deepening reform and opening up become the impetus of the new round of economic development, but also the background of the development of the current consumer finance industry. The policy environment, economy, society and Internet Technology Environment of the consumer finance industry are very advantageous to the development of the industry, but the lag of our country's credit system and legal system construction restricts the development of the industry to some extent.

The adjustment of economic structure, the transformation of the mode of economic development, the promotion of consumption, and the development of general financial policies require a good policy environment for the development of consumer finance. It is the key factor of economic transformation and upgrading to expand domestic demand by promoting consumption upgrade, while innovating financial service, developing consumer finance, strengthening financial support to consumption is an effective way to promote consumption escalation. July 2013 State Council issued "on financial support economic restructuring and upgrading of the guidance", called for further development of consumer finance to promote consumption upgrades. The 18 session of the CPC Central Committee's decision on a number of major issues in the overall deepening of reform plenary that the development of Pu-hui finance, the encouragement of financial innovation, the enrichment of financial market levels and products, the small amount of consumer finance, flexible handling, convenient and quick features are important forms to help all stages to enjoy November 2013 CBRC issued revised edition of "Consumer finance company pilot management measures" to expand consumer finance pilot, relax consumer finance market access and business restrictions. These support policies for the development of consumer finance have created favorable conditions for the consumer finance industry.

The increase of residents ' income and the continuous expansion of consumer goods market, the diversified development of consumer demand and the constant change of consumption habit, lay the economic and social Foundation for the Development of consumer finance industry. Since the reform and opening up, China's rapid economic development, the income level of residents has increased significantly, living standards continue to improve, the 2013 per capita disposable income of urban residents 27,000 yuan, rural residents per capita average income of 8896 yuan, basically in 2007 on the basis of doubling. China's consumer goods market has been expanding, the 2013 total retail sales of consumer goods 23.8 trillion yuan, the 2008 total social consumption of retail sales of more than twice times. The expansion of the scale of consumer goods market also makes the variety of consumer goods continuously rich, electronic communications products, jewelry, household appliances, building and decorating materials and furniture products to meet the diversified development of consumer demand for the development of consumer finance industry to lay the economic foundation. The improvement of living standards, consumption habits and the concept of consumption are gradually changing, the pursuit of consumer quality and enjoy life become more and more people's demand, through the consumer finance moderate advance consumption concept gradually accepted by more people, consumer finance industry development social environment is gradually formed.

The rapid development of Internet technology such as large data and cloud computing provides a good technical environment for the development of consumer finance. The development of Internet technology has widened the business development channel for Consumer financial service providers, so that consumer financial service providers can obtain more target customers at lower cost. More importantly, consumer financial service providers can use internet technology such as large data and cloud computing to better solve the asymmetry of counterparty information, identify business risks and thus control and reduce risk.

However, China's credit system and legal system construction lag, personal credit related information scattered in different departments, consumer financial service providers and consumers ' legitimate rights and interests can not be effectively protected, restricting the development of consumer finance industry. First of all, the construction of personal credit system lag, personal credit information is very dispersed, the comprehensive collection of personal credit data and information system has not yet been established, the lack of national conditions and effective personal credit evaluation system, so that personal real credit situation difficult to comprehensively assess, increase the overall cost of consumer finance industry. Secondly, the legal system that protects the healthy development of consumer finance industry is not perfect, lack of special laws and regulations expressly stipulated in the activities of borrowing, leasing, information disclosure, debt collection, credit reporting, and equal credit in the field of consumer finance, the legitimate rights and interests of consumer financial service providers and consumers cannot be effectively safeguarded. The development of the consumer finance industry in the United States, Europe and Japan has established a more perfect information system and legal system to protect the healthy development of the consumer finance industry.

Second, the development of consumer finance industry

In recent years, China's consumer finance industry rapid development, growth space is huge. From the consumer financial services providers, the bank is the main provider of consumer financial services, professional consumer finance companies to expand the pilot, the electric business platform and Peer-to-peer network loans and other enterprises become the emerging power of consumer financial services. In the field of consumer finance, the students ' consumption stage will be fiercely competitive, the consumer platform of professional college students, the platform of Electric business and Peer-to-peer network loan and other Internet consumer financial service providers scramble to enter, and the niche market areas such as farmers and working-class need to be further explored.

China's consumer credit is in a rapid growth stage, the consumer finance industry is in the initial stage of development, the growth space is huge. China's consumer loan balance of 15.1 trillion yuan in November 2014, up 16.7% from the end of 2013, is expected to grow at around 18% a year, consumer credit is still at a rapid growth stage. Consumer loans accounted for 18% of total loans, consumer loans accounted for 23% of GDP, at a low level in the world, China's consumer credit has a greater growth space. The general consumption credit excluding housing loans and automobile consumption loans accounted for only about 25%, that is, about 3.8 trillion yuan, respectively, accounting for all loans and GDP share of 4.4% and 8%, the U.S. general consumer credit accounted for total loans and GDP share of 25% and 20%. This shows that China's consumer finance industry is still in the initial stage, with a huge growth space.

The bank is the main provider of consumer financial services, the pilot of professional consumer finance company expands further, the electric business platform and Peer-to-peer network loan platform become the new power of consumer financial service. Credit card loans in China's general consumer loans account for a 2/3 share, plus the bank's consumer loans, more than 70% of the general consumer loans are provided by banks. Since the launch of the consumer finance company pilot in 2010, the first batch of 4 consumer finance companies has expanded rapidly, but the loan is still less than 10 billion yuan, accounting for a very small part of the general consumer Credit, the 2013 consumer finance company pilot further expansion, consumer finance companies to relax access threshold, The CBRC has approved recruitment, Societe Generale and Suningyun business and other consumer companies to build. The opening of the Beijing-East white line in early 2014 and the introduction of the July 2014-day cat stage marked the intervention of large-scale electric business platform in consumer finance, Peer-to-peer network loan to develop consumer finance business, Internet enterprises become the new power of consumer financial services.

There will be fierce competition in the consumer staging service, while the consumer financial products for the market segments of farmers and working-class need to be further developed. August 2013, one of the first focus on college students staged shopping installment music Online, March 2014 fun phased set up, mainly for college students group consumption division business, September 2014 Beijing East launched campus white paper to seize the market for students, the current provision of college students consumption phased service agencies have no fewer than 10. The total number of college students is kept in a dynamic balance, the number of college students in the school is about 25 million, and the number of people who accept the idea of phased consumption and need to consume a phased service is only a small part, so there will be fierce competition in the field of student consumption staging service. There are currently fewer consumer financial products for farmers and working-class workers, and most farmers and working-class workers have never received consumer financial services, especially in the Midwest. As farmers and working-class workers make up the majority of the population, consumer financial services providers should further develop more suitable consumer financial products for farmers and working-class people if they want to be bigger and stronger and gain more market share.

III. analysis of the development of consumer finance industry chain

The complete consumer finance industry chain includes the upstream capital supply side, the consumer finance core circle and the downstream consignee or bad-debt acquirer, among which the consumer finance core Circle includes the Consumer financial service provider, the retailer, the consumer and the credit/rating agency. The pattern of the consumer finance industry chain appears as shown in Figure 1, where the arrows represent the flow of information and capital between the components. The upstream funds supply side includes the Consumer financial service provider's shareholder, the consumer financial service provider's asset assignee, the Peer-to-peer Network loan platform investor and so on. Consumer financial service providers include banks, consumer finance companies, college students ' consumption staging platform, electric business platform providing consumer staging service, Peer-to-peer network loan platform and so on. Retailers are broad-ranging retailers, including distributors of various consumer goods and services. Downstream of the reminder consignee is a professional collection of companies, bad buy is a special acquisition of bad debts of financial institutions.

The main body of the upstream capital supply is diversified, the capital supply is various, the Internet consumer financial asset securitization goes to the traditional financial asset securitization. According to the difference of consumer financial service providers, the upstream capital supply and the form of capital supply are different, for the bank, upstream is mainly savers, shareholders and credit assets of the investment institutions, the form of capital supply mainly manifested as savings, capital and investment; for consumer finance companies, upstream is mainly shareholders, The Fund supply form is expressed as the capital contribution, the upstream mainly includes the asset securitization assignee (such as the Fire net), the Peer-to-peer Network loan platform Investment user and so on. The interest installment and the installment music for the typical student consumption installment platform will quickly transfer the contracted assets to the upstream fund supply side, through the asset securitization reduces occupies own funds even basically does not have to occupy own capital, this pattern has gone to the traditional financial asset securitization front.

The core of consumer finance is divided into two modes: consumer payment and Consumer financial service provider payment, third party independent credit and rating are missing at present, and the cost of risk control of consumer financial service provider is higher. Consumer payment mode is the Consumer financial service provider first to the consumer loans, consumers in the consumption of their own pay to the retailer, this model of products mainly have credit cards and comprehensive consumer loans, for comprehensive consumer loan consumer financial service providers difficult to control the flow of money to consumers. Consumer Financial Service Provider Payment mode is consumers in the corresponding consumption of consumer financial services providers directly to the retailer to pay, this model to ensure that the funds earmarked, but the need for consumer financial services providers to expand more cooperative merchants. In the core of consumer finance, the third party credit rating is the key link of the risk control of the Consumer financial service provider, but at present, the construction of the credit system lags behind, and the personal credit rating system is in a state of absence at this stage.

The downstream collection industry has not yet formed a scale, bad debt buyers currently only four major asset management companies specialized banking bad debts, the consumption of financial bad treatment mechanism has not yet formed, consumer financial bad debts will be mainly by consumer financial services provider or financial supplier to bear. The collection industry has just started, the corresponding laws and regulations have not yet been established, the normal development of the collection industry is lack of norms, consumer finance bad debts can not be collected by collection. The consumer finance industry is still small, consumer finance bad debt relative to the banking sector is negligible, the disposal mechanism for consumer financial bad debts in the short term difficult to form, consumer financial service providers or financial suppliers will bear real bad debts.

Iv. Conclusion

The development of consumer finance industry is in the primary stage in China, and it has huge growth space. At present, our country's economic and social environment and policy environment create favorable conditions for the development of consumer finance industry, and the perfection of credit system and legal system will further promote the healthy development of consumer finance industry. Consumer financial service providers increasingly diversified, consumer financial services, the choice is also more abundant, college students in the segment of the market segments of the production of a large number of service agencies, will show a fierce competition trend. The industry chain of the consumer finance industry is gradually perfected, the third party credit and rating is the missing link in the current consumer finance industry chain, and the independent third party collection service has not yet formed. Risk control is the key to the business development of consumer financial service providers, and any form of consumer financial service providers must choose appropriate risk control methods according to their own business characteristics.

Source: Gold Rating Media

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