Debt Collection on the Peer-to-peer Lending Platform Under the Situation of Chinese Culture: A Case Study of PPDai.com

Abstract

In China, high default rate is always the key factor which restricts the development of the P2P lending platform In the recent years. Generally, scholars focus on the pre loan tache to reduce risk and ignore the importance of debt collection management. It’s proved that the capacity of debt collection is the key process of P2P platform for the effective control of bad debts, and then safeguard the interests of creditors. A multiple-case study of the typical P2P lending platform in China "PPDai.com" is used in our research. We found that under the circumstance of the imperfect legal system, collection through relevant contact has become the most important and the most prominent collection methods .At the same time, we discuss how relevant contacts affect the Borrower's mentality from the perspective of Chinese culture including Guanxi, shame culture and kinship culture. The conclusions of this paper give some guidance to Chinese P2P network lending collection practices, has theoretical significance and practical value.