Abstract: Peer-to-Peer lending has such characteristics in its service as large number of borrowers, small amount of individual loan contract, no requirement for borrowers to provide physical securities, and so on, thus the credit standing check and the security restraint mechanism under the traditional credit model cannot be effectively applied to the Peer-to-Peer network lending model. Therefore, Peer-to-Peer lending may face more serious problems of adverse selection and credit rationing. Introducing the social capital of the borrowers into the Peer-to-Peer lending model can help to collect, analyze and transmit the useful credit value information easily and effectively in the network credit model, by virtue of such characteristics of the social capital in the model as cognition, reputation, punishment, capital association and platform mechanism. This can also help to promote the establishment and improvement of the risk assessment system of Peer-to-Peer lending platform. In addition, through constructing a equilibrium model of the Peer-to-Peer lending market, it is found that the social capital of the borrowers can have the function of virtual securities through its strong restraints on the borrowers’ behaviors, which can contribute to the reasonable design and effective implementation of the platform credit contract, making the credit risks form a coupling effect between the effective recognition at the platform level and the active separation at the borrowers’ level.

Key words: P2P network lending; social capital; risk screening; separating equilibrium