P2P clearing up: who will pay for 800 billion bad debts?

category:Finance
 P2P clearing up: who will pay for 800 billion bad debts?


Once upon a time, P2P network loan was popular in the name of innovation. It uses the advantages of Internet technology to break through the limitations of space and match investors funds with market borrowing demand. Under the hot money, all kinds of players swarmed in, P2P network loan brand-new racetrack is taking shape.

Logically speaking, P2P matches inferior assets to unsuitable groups, and the outcome is doomed. On November 29, the person in charge of an asset management company in Shenzhen pointed out to the reporter of time weekly.

After the curtain fell, everything was empty and the ground was in a mess. However, the follow-up problems have not been dealt with perfectly. In August, Guo Shuqing, chairman of the CBRC, publicly said that as of June this year, there are still more than 800 billion yuan of lenders that have not been recovered in the online lending platform.

From the benign retirement of old P2P institutions to zero, the next step may be to increase the recovery of non-performing assets, which I believe is still mainly through judicial channels. On November 30, Huang Ping, a former P2P practitioner and now head of a small loan company in Guangzhou, analyzed to the times weekly.

On the same day, Xu Bei, Executive Deputy Secretary General of the Guangdong Provincial Association of small loan companies, told the times weekly that P2P involves a wide range of people, and it is difficult to define the judiciary. The period of responsibility identification of punishment before the people is very long, and effective recovery generally takes at least three to five years..

From peak to zero

The premise of P2P mode is that the borrowed money can be recovered. In a short period of 13 years, from financial innovation to thunder wave, P2P has finally been eliminated and returned to zero.

In 2009, Yi Fei, a researcher in mutual gold industry, just entered the industry. He recalled to the times weekly that at that time, the scale of P2P industry was only about 100 million yuan, the annual cost of borrowers could reach 70% - 100%, and the annual income of online investors was 30% - 40%.

As some platforms illegally absorb public deposits, some platform borrowers do not pay back, so the capital chain is broken.

In 2015 and 2016, P2P platforms exploded frequently, and the scale of the industry shrank sharply and began to decline. As of the end of December 2019, the number of P2P normal operation platforms has decreased to 343, and the trading volume of P2P online lending industry in 2019 has dropped to 964.911 billion yuan.

On November 6, Liu Fushou publicly said in Beijing that the number of P2P online lending institutions in China has dropped from about 5000 during the peak period to three at present. The scale of loans and the number of participants declined for 28 consecutive months.

Behind the tide is invisible hand to prevent financial risks.

Peak, this industry is too magical. However, Yifei also once thought that as long as we adhere to the standard development, perhaps in 20 years, the industry may be mature and standardized. The interest rate is highly market-oriented, and a small proportion of enterprises will be eliminated every year, and there is a certain competitive clearing capacity.

In 2014, the term of Internet finance became the name of Internet finance platform in Shenzhen. According to incomplete statistics of online lending Tianyan, in 2014, at least 28 P2P companies obtained a total amount of nearly 3 billion yuan of financing.

According to the statistics of 2015-2016 P2P online loan financing report, in 2015, the transaction volume of online loan reached 982.304 billion yuan, a full increase of 288.57% compared with 252.8 billion yuan in 2014. By the end of 2015, the cumulative trading volume of online loans has exceeded trillion yuan.

Ren Zeping, President of Evergrande Research Institute, said in the report Rethinking P2P from everywhere to zero, that in terms of liquidity, since 2014, the stock market has continued to rise, a large number of P2P funds have turned to the stock market, and the liquidity has been withdrawn; in terms of supervision, policies have been implemented in succession.

In 2016, the wind direction reversed

On October 13, 2016, the general office of the State Council issued the notice on the implementation plan for the special rectification of Internet financial risks (hereinafter referred to as the plan), which will focus on the rectification of key areas such as P2P network lending, equity crowdfunding, Internet insurance, third-party payment, asset management through the Internet, cross-border financial business, and Internet financial advertising.

P2P compliance is to do information intermediary services, but most of the industry actually do credit intermediary business. Some industry insiders told the times weekly that less than 10% of the industrys P2P compliance was achieved.

A series of events accelerated the exposure and restructuring of P2P industry risks, and at the same time, greatly damaged the confidence of lenders.

According to Professor Shen Yan, deputy director of the digital finance research center of Peking University, most investors dont lend money to strangers casually. They invest because they believe in the platform. As a credit intermediary, individual network lending business should be licensed.

However, in the chain of P2P, there are many problems: investors (lenders) are not confident and dont continue to invest; borrowers play the helm and dont pay back money; platform credit collapses; the capital chain breaks down, and the three parts of the chain cycle until the end of the industry.

Sequelae of clearance

Most P2P online lending platforms in China are actually doing credit business. People who would like to borrow money from online lending platforms are basically people who cant borrow money from banks, and they are customers that banks cant look down on. Therefore, risk control is particularly important. Yi Fei analysis.

On November 29, an Internet financier in Guangzhou analyzed to the times weekly that the platform should have taken responsibility in the process of the gradual withdrawal of P2P platforms. P2P cant afford too many bad debts. According to the analysis of industry insiders, the bad debt rate of banking industry cannot exceed 2%, and the normal bad debt rate of P2P is between 3% and 5%.

The majority of the borrowers have the ability to repay the principal and interest at maturity.

Whats worse, once the platform exits or explodes, the lender will lose the willingness to pay back the money, and the situation of not paying back the money often occurs.

In the second half of 2018, when the industry was just in chaos, most platforms could still achieve a return rate of about 70%. Later, when we saw the news, we knew that the industry was particularly chaotic and the platform was closing down, so we were not willing to return it. Yifei said that the current general payment rate may not even have 30%.

The characteristic of Internet finance is composed of tens of millions of people, that is, small amount dispersion. Yi Fei told the times weekly.

Small amount of decentralization increases the collection cost of P2P platform. According to industry insiders, the cost of outsourcing collection is high, accounting for almost 20% - 50%, that is, to recover 1 million yuan and give at least 200000-500000 yuan to collection companies. P2P is also unable to pursue hundreds of people, thousands of people or even tens of thousands of people at the same time. Shen Hou, a former risk control manager of a P2P platform, told the times weekly.

P2P has been cleared, but the lessons are worth learning. It has become a consensus that financial innovation can not replace supervision and regulation.

Long way to recover old debts

Judicial disposal is the last means to recover the bad platform, but it faces many problems such as long-term and difficult implementation.

Sun Jianzhang, a lawyer from Beijing Jingshi law firm, told the times weekly that generally speaking, it takes six months to solve civil disputes from filing to closing, and the shortest is three months, which will be extended in reality.

Chen Jins P2P platform is still in the process of clearing and cashing, now many courts do not accept lawsuits involving P2P lending disputes, and the platform has no way to take borrowers. It can only be expected that after the court accepts the lawsuit in the future, the proportion of payment collection of non-performing assets can be increased a little bit.

Lawyer sun Jianzhang told the times weekly that when accepting a lawsuit, the court should first consider whether it is a criminal act (illegally absorbing public deposits). If it is found to be a criminal act, the court will not accept such cases.

It is understood that once P2P explodes, the main body of the platform is put on file, and the platform is paralyzed. After that, the public security system will handle the bad debts.

To solve this problem, we should not rely on a single judicial organ or investor, but should be a systematic project. If the public security organ can find out the relevant information of the borrower, and then the procuratorate will conduct civil litigation on behalf of P2P or investor, the effect may be better.

It is natural and natural to borrow money to repay money. Shen Yan suggested that the construction of social system should form a deterrent, improve the credit culture, and Laolai should enter the credit reference system, and take this opportunity to do a good job in the personal credit system.

Once officially included in the list of dishonest people in online lending, the possible penalties for dishonest people in P2P online lending include: higher loan interest rates and property insurance premium rates; limited access to services such as loans and insurance; and joint disciplinary measures by multiple departments. With the implementation of this kind of punishment, the importance of keeping faith will gradually be rooted in the hearts of the people. Shen Yan said.

On the other hand, if the platform actively collects money, it is easy to be identified as violent collection.

An industry person in Shenzhen told the times weekly that even if it is a P2P platform to recover, the money does not belong to the platform but to the investors. Even if P2P platform is recovered, it is difficult to make up for the broken capital chain.

If the platform feels that it is difficult to recover itself, selling the non-performing assets at a discount to a third-party non-performing asset disposal company is also a way out. The person in charge of a small loan company in Guangzhou analyzed to the reporter of the times weekly. Where will investors go in the future. Guo Shiliang, a financial observer, believes that for industries with a scale of more than one trillion yuan, investors are expected to take back part of the principal in the future as the platform carries out a benign exit strategy. He said that for many investors, after this investment experience, they will gradually change their original risk preference and asset allocation strategy and either turn to bond funds with lower risks, or to certificates of deposit or monetary funds with lower risks. (Huang Ping, Chen Jin and Shen Hou are pseudonyms in the article) source of this article: Yang Bin, editor in charge of times weekly_ NF4368

If the platform feels that it is difficult to recover itself, selling the non-performing assets at a discount to a third-party non-performing asset disposal company is also a way out. The person in charge of a small loan company in Guangzhou analyzed to the reporter of the times weekly.

Where will investors go in the future.

Guo Shiliang, a financial observer, believes that for industries with a scale of more than one trillion yuan, investors are expected to take back part of the principal in the future as the platform carries out a benign exit strategy. He said that for many investors, after this investment experience, they will gradually change their original risk preference and asset allocation strategy and either turn to bond funds with lower risks, or to certificates of deposit or monetary funds with lower risks.

(Huang Ping, Chen Jin and Shen Hou are pseudonyms)