By Wang Yang, Research Team on “Financial Technology”, Research Institute of Finance, DRC

Research Report, No. 9, 2020 (Total 5753) 2020-1-22

Abstract: The P2P (peer-to-peer online lending) industry experienced a period of boom in China whereas it is now at an overall clearance phase due to poor management and illegal operations. However, the P2P industry in the U.K. and the U.S. in general has witnessed a relatively stable development with continuously expanded lending scale and loan default rate is kept within an acceptable range, which has become a useful supplement to traditional financial sectors. The achievements mentioned above mainly attribute to the following five factors: an effective supervision mechanism with constant improvement, refined social credit system and legal system, proactive support and guidance rendered by the government, close cooperation with financial institutions and the industry’s relatively complete risk management system. The experience of P2P development in the U.K. and the U.S. shows that apart from a basic environment which contains a sound credit and legal system and mature financial market, work needs to be done to enhance the effectiveness, inclusiveness and adaptability of financial supervision so as to accelerate the healthy development of new business format in financial sectors bolstered by newly-emerged technologies.

Key words: P2P, financial innovation, financial supervision