On Risk Management of China's P2P Online Loan Platform Based on Stress Test Analysis: A Case Study of Jimu Platform

With the development of Fintech, P2P online loan platforms have been growing rapidly since 2008. This type of peer-to-peer online lending has greatly improved the efficiency of capital operations and has been gradually replacing the traditional private lending methods. Under the background of macroeconomic instability, China's P2P online loan platform mainly suffers from credit risk, as well as liquidity risk, operational risk, policy risk, and technical risk due to weak loan review, poor credit management, and other reasons. According to the statistics of a P2P data website called " Wandai tianyan", by the end of March 2018, 3996 online loan platforms had exited the market due to unsound risk management, which caused huge losses to investors. This paper does a case study of a P2P online loan platform in China called "Jimu". It identifies the risks it faced. Then, by using its overdue ratio data from January 2014 to March 2018 as indicators, it selects the main variables which impact the overdue ratio and conducts a multiple regressions. Thirdly, according to the regression results, it uses stress-testing model to test the credit risk, the main risk of Jimu platform, under the different scenarios. Based on the test results, it helps to make an assessment of such risks. Finally, this paper puts forward the risk management strategies for Ji Mu P2P platform, which mainly include: enhancing its risk awareness, improving the credit review system, strengthening information disclosure and data sharing between platforms.