Why China Is The Ideal Environment For The Rise Of Peer-To-Peer Lending

NameProfessor Subject Date Why China Is the Ideal Environment for the Rise of Peer-To-Peer LendingCHAPTER ONEIntroduction Peer-to-peer lending (commonly abbreviated P2P) is an emerging financial services model that involves facilitation of loans between individuals and groups via online means. The model provides an internet-mediated platform for businesses and people to borrow funds without the involvement of the traditional banking institutions. The first P2P platform in the world was launched in 2005 in the UK by Zopa. This was followed by a similar service in the United States in 2006. Since then, several P2P business models have been launched in several countries across the world. China’s first P2P lending platform, CreditEase, was established in early 2006 in Beijing. Initially, the growth rate of the P2P platform in China was very slow as evidenced by the fact that by 2011, there were only 50 such platforms in the country. This number expanded significantly reaching 200 platforms in 2012, 850 in 2013 and over 1600 in 2014. Currently, it is estimated that China had more than 5000 fully operational P2P platforms in 2016. Although stringent measures have been established by the P2P service providers to protect investors, most