Second, the orientation of the auction loan is transparent and sunny private lending, which is an effective supplement to China's existing banking system. We know that private lending is based on geography and consanguinity, with simple procedures and flexible methods, and has incomparable competitive advantages over formal finance. It can be said that private lending adapts to the financing characteristics and needs of small and medium-sized enterprises and rural areas to a certain extent, enhances the self-regulation ability of economic operation, and is a useful supplement to formal finance. And pat loan has some unique functions:
1. Generally, it is a small unsecured loan, and the borrowers covered are generally middle and low income classes, which are not covered by the existing banking system, so it is a necessary and effective supplement to the banking system;
2. With the help of the network and the community, emphasizing everyone's participation, effectively reducing the audit cost and risk, and making micro-loans possible;
3. The platform itself does not participate in lending, but does more functions such as information matching, tool support and service;
4. Relying on the Internet, unlike the existing private lending, is very transparent;
5. Another big difference from the existing private lending is that the borrower's interest rate is set by himself, and the website sets the legal maximum interest rate limit, which effectively avoids the occurrence of usury;
6. Because it is aimed at low-and middle-income people and entrepreneurs, it has considerable public welfare nature, so it has great social benefits. It solves the problems of high cost and difficult tracking of many institutions trying to make small loans.