The Increasing Role of Online Peer-to-Peer Lending in Chinese Financial Market

Abstract

As a representative of inclusive finance, online peer-to-peer (P2P) has become an important part of China's financial market and played a more and more important role. Since 2007, the development of P2P in China has gone through three periods: the non-regulatory period, semi-regulatory period and regulatory period. Based on the data from April 2013 to December 2017, this paper explores and compares the relationship between P2P and financial market during different periods. Results show that with the development of P2P, the correlation between P2P and traditional private lending has become stronger gradually. The interest rate of P2P is influenced by the supply and demand of financial market funds with the marketization characteristics.