Internet Business Thinking

Chapter 19 Online Lending: Ending the Lending Crisis?Financial Age Revolutionary? (1)
(Section [-]) The Internet has no hard-to-borrow money

P2P credit is not just a simple form of technology, but also an innovation in concepts and methods. It demonstrates the huge power of the combination of financial disintermediation and the Internet on the personal side.However, the market is also generally concerned about the risks involved, especially for those new forms of P2P credit derived from practice.

Since there is no clear legislation at present, P2P finance (Person-to-Person, individual to individual) is controversial in China.But no one can deny that P2P is a form of financial innovation that breaks the stereotype.

Paipaidai is the first P2P online credit lending platform in China co-founded by Zhang Jun and his team. It is also the first Internet financial platform to obtain the national "financial information service" qualification. Loan already has an identity recognition in China.But how does P2P develop?I would like to use the three questions of philosophy to explain: who are you?Where are you fromWhere are you going?

Copy Yunus mode

Why is there a Paipai loan?The birth of Paipaidai has a lot to do with Nobel Peace Prize winner Professor Yunus and his Grameen Bank.Zhang Jun said:

"In the second half of 2006, my team and I were very confused. Before that, we created a video website on the Internet. After the website was completed, we reflected on a problem: no matter how good the video website is, how can we give How much value does society bring?"

There is no doubt that the video industry is definitely an industry with "money" opportunities, but it is not what we want.People in our team, in the eyes of others, always have some crazy or even stupid public welfare ideas-we love money, but do not take the accumulation of personal wealth as the first goal; we hope that we are not businessmen, although we have to do it first Successful businessman.

"While we were hesitating, we saw the report that Professor Yunus had won the Nobel Peace Prize. All the bits and pieces were instantly connected into a thread in our minds - making small loans through the Internet. This can help those in need of funds. People can improve their lives, improve their operations, and realize their dreams; they can also help those who invest get paid; and they can also punish those who are dishonest.”

"Inspired by this, we decided to transform and copied a "Yunus model" in China: doing small loans on the Internet. Its important value to our team is that on the one hand, it satisfies our idea of ​​doing public welfare, and on the other hand On the other hand, it can integrate business.”

Make the simplest platform
Zhang Jun's idea is bold.He and his team know deeply that any dream without support is an empty dream.If they simply copy Yunus' offline model to China, they are doomed to fail.Fortunately, we now have the advanced production tool of the Internet.When you look at old domains with advanced production tools, it's surprising how many opportunities arise in many places.This is the case with the combination of the Internet and traditional finance.On the one hand, it is the innovation of IT technology, which makes the previously inefficient links become more efficient; on the other hand, it is the innovation of the financial mechanism, which can change the old mechanism and give birth to new things by creating some rules.

In 2007, China's first P2P (person-to-person) pure credit unsecured online lending platform, Paipaidai, was established in Shanghai. At the beginning of the planning and operation of Paipaidai, Zhang Jun and his management team took the initiative to communicate with many Internet and financial circles. Discuss with friends, and these exchanges often collide with countless sparks.Some people suggested that they do creditor's rights transfer and quickly expand the scale; some people said that they could learn from the United States and do asset securitization; some people said that they could introduce guarantee companies and insurance companies to build a large platform; function of...

These directions really excited Zhang Jun and his teammates.However, they finally chose the way of technological innovation.Compared with other P2P companies that emerged later in China, Paipaidai adopts a pure credit network lending model.Paipaidai does not make guarantees, but uses Internet technology to solve problems in lending.Since there is no guarantee, a lot of infrastructure needs to be done - platforms, talents, brands, etc., which take a long time and produce slow results. Therefore, only Paipaidai is using this model in China.But Zhang Jun believes that this is a more stable road that can go further.

"Diversification of investment, income covering risk, and investment portfolio" are the three principles used by PPDAI to educate investors.They insist that every investment should be considered by investors to ensure that all the money flowing through Paipaidai is smart money.They firmly believe that smart money will not follow the crowd easily, and that smart money can do the right thing and play a more positive role in the company, industry, and economy while making profits.

So far six years ago, Paipaidai is still a simple platform. Zhang Jun and his teammates believe that this kind of self-restriction will allow them to develop better in a longer period of time.

Focus more on long-term value

I had a classmate and we started a rock band together in college.After graduation, most people choose to enter large enterprises, but he went to Germany as a programmer.After many years, he gave up immigration and returned to the country.He stopped writing programs, he started drawing.

When I saw his paintings, I was shocked.His paintings are very peculiar: from a distance, they are ink landscapes; but from a closer look, every stone, every small tree, and every wave is "assembled" by strange and delicate patterns painted by hand.Don't talk about creativity, how much energy does it take to create this kind of painting?I asked him why he used this way of painting?He said, I am not from a major, so I can't produce a painting in a few days.My painting takes several months or even more than a year.

How similar is Zhang Jun’s thinking when he founded Paipaidai!The idea of ​​establishing Paipaidai started at the end of 2006 and started operation in 2007.Zhang Jun knew at that time that the idea of ​​Paipaidai was too advanced and might not be appropriate.But looking at it from a long-term perspective is different.Zhang Jun firmly believes that Internet finance is a major trend.Enduring loneliness allows them to make more mistakes earlier and faster, and to test more feasibility and impossibility.So from the very beginning, they wanted to make Paipaidai a different company.Instead of short-term planning, they focus more on things that can bring long-term value.

In fact, from 2007 to now, many hot spots have disappeared, but Paipaidai is still there.Many people tend to overestimate the development within 3 years, but underestimate the development after 10 years.Zhang Jun hopes that Pai Pai Dai will become a great company, and also hopes that Pai Pai Dai can inherit Yunus' philosophy: to view the world in a way that creates long-term value and plan our development.

Online Business Tips
Yunus Model and P2P Finance
Dr. Yunus, winner of the 2006 Nobel Peace Prize, founded Grameen Bank in 1983. Through unsecured microfinance business and a series of financial innovation mechanisms, while creating profits, it also connects the poor and the poor. Alleviating the poor achieves a win-win situation.

Yunus' unsecured microfinance business and a series of financial innovation mechanisms are the initial prototype of P2P finance.At present, it is mainly divided into two modes: network P2P based on e-commerce and traditional offline P2P.The Yunus model is offline P2P.

(Section 2) O2O P[-]P
Renrendai Business Consultant (Beijing) Co., Ltd. (hereinafter referred to as Renrendai) O2O online and offline docking model is a set of business logic that has evolved ideally for the localization of American P2P online lending in China.Due to the imperfect domestic credit investigation system, it is impossible to complete the credit investigation of borrowers online. With the help of the offline network of its brother company Youxin, Renrendai has completed customer credit investigation, review, post-loan management, collection and other work. In 2012, the transaction volume of Renrendai increased by 803%, and in the first half of 2013, it increased by 267% year-on-year. Renrendai has achieved rapid development in more than two years.

At present, domestic P2P is mainly divided into three types.

One is the offline transaction-based model, represented by CreditEase. Although the scale is large enough, the potential risks are huge; the other is the purely online model of Paipaidai, which develops relatively slowly; the other is the online The model of combining online and offline business development is represented by Renrendai.This model has the characteristics of rapid development, bringing the virtual world of the network into reality, and more controllable risks.At the same time, because there is no intermediary in the transfer process of creditor's rights, the creditor's rights are clearer and clearer, and the lender obtains more benefits.

Renrendai Business Consultant (Beijing) Co., Ltd. (hereinafter referred to as Renrendai) O2O online and offline docking model is a set of business logic that has evolved ideally for the localization of American P2P online lending in China.Due to the imperfect domestic credit investigation system, it is impossible to complete the credit investigation of borrowers online. With the help of the offline network of its brother company Youxin, Renrendai has completed customer credit investigation, review, post-loan management, collection and other work.The offline development of the loan terminal and the online development of the financial management terminal integrate the two modes and take advantage of each. Under the premise of effective risk control, in 2012, the growth rate of Renrendai transaction volume reached 803%, and in the first half of 2013 With a year-on-year increase of 267%, Renrendai has achieved rapid development in more than two years.

As we all know, only a team with a professional financial background can effectively control the risk control of the platform.Therefore, Zhang Shishi, chairman of Renrendai, regards professional team building as the cornerstone of the rapid development of Renrendai.The essence of the P2P small online loan provided by Renrendai is finance.Most of the Renrendai team members graduated from the finance department of famous universities such as Tsinghua University or Peking University, and many of them have working experience in international financial institutions, which can be called a professional luxury version of the team configuration.

In the past two years, domestic P2P has been in the stage of rapid development, but it is still in the period of experimentation.Therefore, the future must be more stable and oriented.A foreign company can achieve a scale of 100 billion yuan. The current scale of P2P in China is still small compared with the industry potential, and the current monthly turnover of Renrendai is less than 1 million yuan.But Zhang Shishi is very optimistic about the development of P2P in China.

Exploring the P2P localization model

Users can obtain credit ratings and issue loan requests on Renrendai to meet their personal financial needs; they can also lend their spare funds to individuals with good credit and financial needs through Renrendai.The imperfection of China's online credit reporting system and the difficulty of post-loan management make people who really want to borrow money and have the ability to repay the money do not have the habit of searching for loans on the Internet. What should we do?In order to solve this problem, Renrendai focuses on offline loan development.

According to Zhang Shishi, there are currently more than 100 people in Renrendai, and there is also a Youzhongxinye Business Consultant (Beijing) Co., Ltd. Youxin provides services to many customers who are not familiar with the Internet, that is, moving the P2P business model offline. Youxin has its own marketing team and risk control team, which has grown to more than 2000 people.

As early as 2011, the entrepreneurial team of Renrendai established Youxin Company, focusing on mining, exploring and accumulating experience in the market where high-quality offline customers are located.And Renrendai also reached an in-depth cooperation with Youxin in the following year, using Youxin's stores all over the country to help Renrendai expand this type of customer base and carry out effective post-loan management for customers.Renrendai and Youxin merged to form a group company at the end of 2012. They currently work on the same floor of an office building.

Zhang Shishi believes that although the current model has maintained rapid development, in the long run, P2P will still develop in the direction of a pure platform, but this depends on the development environment of the external market.With the progress of my country's credit system, the improvement of data informatization, and the further enrichment of data, the ideal pure platform organization will gain a broader living space.The core is to build a platform around personal and credit, not to develop in a social direction.

Design credit review process
In the eyes of outsiders, P2P, an emerging model of Internet finance, is a high-tech industry that uses Internet data analysis to efficiently allocate loans, and it is a "spring snow".In fact, the current P2P is completely "lower Liba people", without any shadow of high technology.

Zhang Shishi said frankly that one of the current obstacles to Renrendai is that credit information is not very convenient, and the data is not enough to support credit. It is not yet mature to rely solely on data to generate credit.The review of users is still a relatively traditional offline method. Even if it is a loan of several thousand yuan, it must be submitted strictly according to the process, scanned a large number of documents, and filled in various forms, including collecting and entering personal information, business licenses, and transaction records, and then through itself. The scoring system generates credit ratings.If you want users to have a better experience, you must streamline the process, or even move it completely online.

P2P is reviewed online in foreign countries.However, in China, the online approval mechanism is immature, unable to distinguish the authenticity of materials, unable to conduct on-the-spot assessment of credit, unable to intuitively judge business conditions, unable to manage post-loan collections, and coupled with the huge potential customer base of offline small and micro enterprises, the lender’s review Most are done offline.The average credit line of Renrendai is about 5 yuan, and the auditors process 5 to 10 loans a day. The cost to each customer is tens of dollars, which is relatively low.

Zhang Shishi divided the current possible profit models of Renrendai into three types: one is the management fee for the borrower; the other is the management fee for wealth management users, most of which are free at present; the third is the secondary market transfer fee for debt —The transfer platform is being built.At present, Renrendai’s income mainly comes from the first part, but he did not disclose the level of profitability.

Margin Risk Control Mechanism

In 2012, Renrendai's bad debt rate of more than 90 days overdue was only 0.9%, and the increase in risk in the fourth quarter of 2012 had sounded the alarm for the company's risk control.

Due to China's imperfect credit system, compared with foreign P2P, domestic P2P has been widely involved in guarantees. In order to meet domestic needs and provide customers with a safe experience, Renrendai has set up a risk fund to provide all borrowers Assure.If there are bad debts, they will be taken from the venture fund pool, and the bad debts will be collected and put into the pool.Currently, the bad debt rate is around 1.5%.All the service fees collected by Renrendai will be stored in the risk reserve account, which will be used for Renrendai's principal protection plan, and the risk reserve will be around 1000 million yuan.After 30 days of overdue payment by the user, the risk reserve will be activated, and the principal will be paid in full to the lender, and the collection will be started. After 90 days, a professional institution will be entrusted to collect the payment.

The risk fund of Renrendai is drawn from the loan turnover, ranging from 0 to 5 points according to the user's credit rating.On the website of Renrendai, we can see the information of each lender, including A, B, C, D, E, etc., which is the credit rating made by Renrendai based on the credit data and information of the lender. , to facilitate wealth management customers to make judgments when lending money.In addition, they also cooperate with a number of third-party agencies such as the National ID Card Center of the Ministry of Public Security, so that they can promptly and effectively distinguish the authenticity of the information provided by the lender.

Regarding the risk issues arising from the platform's involvement in guarantees, Zhang Shishi explained that Renrendai adopts a risk deposit mechanism, and the company's risk bearing is limited.If the risk margin is not enough, it can be transferred to the user, and the additional risk is borne by the customer.For example, if a borrower has a profit of 12 points, Renrendai will charge the lender a transaction amount risk deposit of 5 points. Once the risk increases, the risk margin will be increased to 10 points, which will be intercepted from the loan income, which is completely acceptable to the borrower. Earn 5 points less because he still has 7 points to gain.Renrendai also encourages users to spread the principal among several loan users to reduce risks.In addition, Renrendai implements the repayment method of equal principal and interest. If there are repayment problems in the first three periods, the company's platform will intervene in advance.

(Section 2) P[-]P online lending under the shadow of "Ponzi scheme"
Starting from zero in 2007 and experiencing 6 years of self-growth, I thought that P2P online lending could carry the banner of Internet finance. The burning smell is constantly being emitted, and the entire industry is facing the possibility of being strictly controlled.

On December 2013, 12, the front desk of Shanghai Jinxin Wealth Management Co., Ltd. (hereinafter referred to as Jinxin Wealth), a P2P (Peer to Peer Lending) online lending platform, became the target of angry crowds. Hitting the table with the palm of his hand, he asked Jinxin Fortune for an explanation.

The cause of the incident was that a letter from all employees of the company to their boss Xiang Guoxiao, who had been missing for 4 days, was published on the platform of Jinxin Fortune.The general meaning of the report is to urge the boss to "stand up bravely and take due responsibilities", remind him to "restore his reputation" and "save the families of hundreds of investors", and at the end he also specifically warns "don't violate the bottom line of the law" And violate the most basic moral bottom line of being a human being."

The boss of Jinxin Fortune's running away is not the first case of "running performance" in the P2P online lending industry. Previously, the bosses of P2P online lending platforms such as Taojindai, Angel Plan, and Tianlidai also ran away.According to the data provided by the third-party information "Institutional Online Loan Home", as of December 2013, nearly 12 P70P online lending platforms have failed or closed down, and since November 2, an average of one P2013P online lending platform has Online lending platforms are in crisis.

(End of this chapter)