Peer To Peer Lending And The Democratization Of Credit Markets
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Peer To Peer Lending And The Democratization Of Credit Markets
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Author : Eugenia Macchiavello
language : en
Publisher:
Release Date : 2016
Peer To Peer Lending And The Democratization Of Credit Markets written by Eugenia Macchiavello and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2016 with categories.
The financial crisis has led to an understandable distrust towards banks and mainstream financial operators and to banks curtailing credit for the weakest part of the real economy. This has also caused the flourishing of non-traditional forms of financial services (such as pawn shops, alternative private markets, microfinance, crowdfunding) having in common the rejection of traditional intermediaries and the idea of democratizing and disintermediating finance. Peer-to-peer lending is a fast rising star capturing regulators' attention (now highly concerned about shadow banking) because of the variety of risks involved and, consequently, of possible legal qualifications and regulatory responses. In the present paper, after having analysed the main features of crowdfunding, the benefits and reasons for success as well as the risks of P2P lending, I will discuss the major legal issues surrounding P2P lending platforms with special reference to EU law. I will examine the solutions adopted in some countries (US, UK, Italy and France), identifying three different trends in regulatory approach to social lending (banking, securities and “practical”) as well as their weaknesses. Finally, having recognized the need for an ad hoc regulation and the problems arising from a fragmented regulatory response, I will propose some guidelines for creating a common European framework and, more generally, harmonizing such sector, also with reforms at national level. In doing so, I will take into account the most recent developments in EU financial law (e.g. MiFID II, AIFM, etc.), current trends in financial regulation (e.g. “consumerization”), recent studies about P2P lenders' investment choice process, and the latest evolution of the P2P sector (e.g. entry of professional investors as lenders, automatic bid systems, etc.).
Interdependence Between Online Peer To Peer Lending And Cryptocurrency Markets And Its Effects On Financial Inclusion
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Author : Sunghun Chung
language : en
Publisher:
Release Date : 2023
Interdependence Between Online Peer To Peer Lending And Cryptocurrency Markets And Its Effects On Financial Inclusion written by Sunghun Chung and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2023 with categories.
Online peer-to-peer (P2P) lending has emerged as an innovative financial technology (FinTech) platform that renders financial services that are potentially more inclusive and affordable than those offered by traditional financial institutions. A similar purpose is served by cryptocurrency markets, where transaction costs are reduced and financial accessibility is improved based on disruptive technologies such as blockchain and distributed ledgers. Despite these developments, however, in the operations management literature limited attention has been devoted to the contribution of online P2P lending to the promotion of financial inclusion (i.e., the availability and usage of financial services for all groups of people) and its dynamic interplay with cryptocurrency markets. The rise of cryptocurrency markets affects the composition and activity of borrowers and investors in P2P lending markets and hence the capacity of the latter to support financial inclusion, leading to an operations management challenge in online P2P lending. We examine how cryptocurrency markets influence P2P lending markets' democratization of access to financial services, particularly P2P borrowing. To investigate these effects in depth, we develop a simple theoretical model to derive testable propositions, which are then empirically validated on the basis of unique datasets.We find that the growth in cryptocurrency markets is associated with increased loan requests and larger loan amounts in P2P markets, especially from borrowers who maintain good credit ratings, possess technical knowledge about cryptocurrencies, and intend to borrow for investment purposes. Our results suggest that cryptocurrency markets bring economic gains to the P2P lending market, at least in the short term. Nonetheless, the transfer of funds from P2P lending to cryptocurrency markets, particularly by highly creditworthy and tech-savvy investors, may provoke increased inequality in access to P2P lending markets. By scrutinizing the interdependence between two representative FinTech markets we uncover important operations management implications for theory and practice regarding the healthy growth and effective governance of crowdfunding platforms and the corresponding sustainability of their role in upholding financial inclusion.
The Expansion Of The Peer To Peer Lending
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Author : Olena Havrylchyk
language : en
Publisher:
Release Date : 2019
The Expansion Of The Peer To Peer Lending written by Olena Havrylchyk and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2019 with categories.
We use data from the two leading P2P lending platforms on the US consumer credit market, Prosper and Lending Club, to explore the main drivers of the expansion of consumer demand for P2P credit. We exploit the heterogeneity in local credit markets at the county level to test three hypotheses: 1) global financial crisis; 2) competition and barriers to entry; and 3) learning costs. Disentangling between these hypotheses is difficult because the financial crisis has triggered an increase in market concentration and the closure of bank branches. Our findings suggest that P2P lending platforms have partly substituted for banks in counties that were more affected by banks' deleveraging in the wake of the financial crisis. High market concentration and high branch density appear to deter the entry and expansion of the P2P lending. Finally, we find a positive impact of variables that are correlated with lower learning costs, such as education, population density, high share of young population, as well as important spatial interactions.
Disrupting Finance
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Author : Theo Lynn
language : en
Publisher: Springer
Release Date : 2018-12-06
Disrupting Finance written by Theo Lynn and has been published by Springer this book supported file pdf, txt, epub, kindle and other format this book has been release on 2018-12-06 with Business & Economics categories.
This open access Pivot demonstrates how a variety of technologies act as innovation catalysts within the banking and financial services sector. Traditional banks and financial services are under increasing competition from global IT companies such as Google, Apple, Amazon and PayPal whilst facing pressure from investors to reduce costs, increase agility and improve customer retention. Technologies such as blockchain, cloud computing, mobile technologies, big data analytics and social media therefore have perhaps more potential in this industry and area of business than any other. This book defines a fintech ecosystem for the 21st century, providing a state-of-the art review of current literature, suggesting avenues for new research and offering perspectives from business, technology and industry.
Peer To Peer Lending Platforms And The Stability Of The Banking System
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Author : Jooyong Jun
language : en
Publisher:
Release Date : 2018
Peer To Peer Lending Platforms And The Stability Of The Banking System written by Jooyong Jun and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2018 with categories.
This study examines how the advent and the expansion of peer-to-peer(P2P) lending platforms affect financial stability, especially the soundness and the stability of banks and the banking system. We analyze the risks of various bank failures by comparing two cases of competition, a benchmark case in which only banks exist and no P2P lending platforms exist and the case in which the credit market is segmented and a P2P lending platform operates only in the low-credit score consumers' markets. Our findings are as follows: (i) the insolvency risk of individual banks increases when they compete with the P2P lending platform in the low-credit score consumers' markets, but (ii) the illiquidity risk of individual banks is reduced; and (iii) the systemic risk in the banking system triggered by individual defaults is also reduced. Our results imply that if the role of the P2P platforms and banks are properly differentiated so that P2P lending platforms focus on the provision of credits in the low-credit score consumers' markets, and the banks concentrate more on high-credit score consumers' markets and protected deposits business, the impact of spread of P2P lending platforms on the current banking system's stability may be limited.
Where You Live Matters
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Author : Mohammed Alyakoob
language : en
Publisher:
Release Date : 2020
Where You Live Matters written by Mohammed Alyakoob and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2020 with categories.
In the past decade, the proliferation of peer-to-peer (P2P) lending has been disrupting the traditional consumer credit market. For prudent policymaking, particularly in judging the ramifications of potential bank mergers and acquisitions (M&As) and informing various traditional bank stakeholders, it is crucial to understand if and how banks are conditioned to respond to the rise of P2P lending. Accordingly, we study whether local market structure drives heterogeneous responses of traditional banks to convert P2P borrowers back to conventional bank loans. We utilize detailed, loan-level data from major P2P lending platforms in the U.S., combined with rich information of local markets, and employ multiple empirical strategies that control for detailed local market characteristics, exploit instrumental variable methods, or explore exogenous shocks to bank lending. We find that ceteris paribus, a borrower, who resides in a more competitive market, is more likely to pay off her P2P loan early by making a large one-time payment than a borrower from a less competitive market. We provide extensive evidence that banks operating in a more competitive market are more incentivized to respond to P2P lending by converting these “FinTech” (financial technologies) borrowers to conventional bank loans. The results suggest that borrowers from different markets do not benefit equally from P2P lending being a disruptor of the traditional consumer credit market. Our study has implications for P2P lending, other FinTech based markets, and the consumer credit market in general.
Emergence Of Financial Intermediaries In Electronic Markets
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Author : Sven C. Berger
language : en
Publisher:
Release Date : 2014
Emergence Of Financial Intermediaries In Electronic Markets written by Sven C. Berger and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2014 with categories.
We analyze the role of intermediaries in electronic markets using detailed data of more than 14,000 originated loans on an electronic P2P (peer-to-peer) lending platform. In such an electronic credit market, lenders bid to supply a private loan. Screening of potential borrowers and the monitoring of loan repayment can be delegated to designated group leaders. We find that these market participants act as financial intermediaries and significantly improve borrowers' credit conditions by reducing information asymmetries, predominantly for borrowers with less attractive risk characteristics. Our findings may be surprising given the replacement of a bank by an electronic marketplace.
Does Gender Affect Funding Success At The Peer To Peer Credit Markets Evidence From The Largest German Lending Platform
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Author : Nataliya Barasinska
language : en
Publisher:
Release Date : 2014
Does Gender Affect Funding Success At The Peer To Peer Credit Markets Evidence From The Largest German Lending Platform written by Nataliya Barasinska and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2014 with categories.
Studies of peer-to-peer lending in the USA find that female borrowers have better chances of getting funds than males. Is differential treatment of borrowers of different sexes a common feature of peer-to-peer lendingmarkets or is it subject to specific businessmodels, ways of fixing loan contracts and even national financial systems? We aim at answering this question by providing evidence on loan procurement at the largest German peer-to-peer lending platform Smava.de. Our results show that gender does not affect individual borrower''s chances of funding success on this platform, ceteris paribus. Hence, gender discrimination seems to be a platform-specific phenomenon rather than a common attribute of this innovative form of credit markets.
The Regulation Of Peer To Peer Lending Platforms In The Consumer Credit Market
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Author : Annalena Dierks
language : en
Publisher:
Release Date : 2018
The Regulation Of Peer To Peer Lending Platforms In The Consumer Credit Market written by Annalena Dierks and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2018 with categories.
A Survey Of Credit And Behavioural Scoring
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Author : L. C. Thomas
language : en
Publisher:
Release Date : 1999
A Survey Of Credit And Behavioural Scoring written by L. C. Thomas and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 1999 with Credit scoring systems categories.
