Jieyue: Exploring Peer-to-Peer Finance

Beijing Jieyue United Information Consulting Co., Ltd. (Jieyue), a Chinese peer-to-peer (P2P) company established in mid-2013, offered financial services to investors through wealth management stores and an online service platform—xiangshang360.com. The platform served online customers, while the stores focused on those who had no interest in managing their wealth online. For borrowers, Jieyue provided offline services only, and it also performed credit checking through offline channels. Jieyue believed that the offline channels, particularly in third-, fourth-, and fifth-tier cities, could be the foundation for its sustained development, as well as a barrier for competitors. However, China’s P2P industry was facing the toughest regulatory supervision in history in 2016, and it was estimated that only 10 per cent of P2P companies could survive the increased regulatory supervision. Jieyue needed to make a decision: should it revise its business strictly according to the supervision rules or should it follow its original direction with a few minor adjustments to its business?

This case is designed for courses on finance, innovation, and entrepreneurship in graduated and postgraduate programs that cover managing and establishing business models. Students may already be business owners or those planning to start a business. Other students may include senior managers of state-owned and foreign-funded enterprises. This case describes how Jieyue explored P2P lending to provide participants with an in-depth understanding of how to establish value networks and how to leverage their advantages to create a favourable ecosystem for their businesses. After completion of this case, students will be able to understand how start-ups can<ul><li>identify their own value networks and distinguish between partners and competitors; and</li><li>develop strategic priorities and effectively allocate limited resources based on a clear value network.</ul></li>

• P2P finance, lending,credit,risk control