Abstract
The Grameen Bank founded by Muhammad Yunus provides small loans, ranging from $50 to $100 to rural borrowers in Bangladesh. It makes loans to rural borrowers to help them get the start-up capital to start their own business and improve the quality of life without the need for collateral. Even though it provides loans without the need for collateral, it maintains a low default rate. The Grameen method not only has been applied to many developing countries to alleviate poverty but it also stimulates the emergence of online P2P lending platform. The first online P2P lending platform, Zopa was launched in UK in 2005 and Prosper, Lending Club and Kiva etc. came to the market afterwards. They combine the internet technology with the concept of the Grameen method that borrowers can get loans without the need for collateral. The online P2P lending platform functions as an intermediary between borrowers and lenders and charge service fee from both. In 2006, the first online P2P lending platform was launched in China, however, the social credit rating system in China is still in need of improvement and is not that mature as its Western counterparts. Therefore, this study focuses on the case of the first online P2P lending platform, CreditEase to reveal how online P2P lending platform developed with the immature social credit rating system and its credit risk management procedure to ensure borrowers’ trustworthiness and its trust-building mechanisms. The findings will help on-line marketplace providers in countries without mature social credit rating system to build successful P2P lending marketplace.