Peer-to-peer lending: An empirical study

Research output: Chapter in Book/Report/Conference proceedingConference contribution

10 Scopus citations

Abstract

Online peer-to-peer (P2P) lending, where individual investors provide unsecured loans directly to individual borrowers without the intermediation of banks, has experienced rapid growth in recent years. One of its defining features is the presence of social networks, which could provide important credit information about borrowers. Drawing on the literature in finance and social networks, I study whether and how network metrics affect the outcome of financial transaction in this market, and whether such credit-worthiness is supported ex post through loan performance data. Results show that relational aspects of the online social network help mitigate information asymmetry in the lending process, and that a critical success factor of the industry is to better reveal and utilize the soft credit information embedded in social networks.

Original languageEnglish (US)
Title of host publication15th Americas Conference on Information Systems 2009, AMCIS 2009
Pages132-138
Number of pages7
StatePublished - Dec 1 2009
Event15th Americas Conference on Information Systems 2009, AMCIS 2009 - San Francisco, CA, United States
Duration: Aug 6 2009Aug 9 2009

Publication series

Name15th Americas Conference on Information Systems 2009, AMCIS 2009
Volume1

Other

Other15th Americas Conference on Information Systems 2009, AMCIS 2009
CountryUnited States
CitySan Francisco, CA
Period8/6/098/9/09

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Keywords

  • Decentralization
  • Information asymmetry
  • Reputation
  • Social networks
  • Trust

ASJC Scopus subject areas

  • Computer Science Applications
  • Computer Networks and Communications
  • Information Systems
  • Library and Information Sciences

Cite this

Lin, M. (2009). Peer-to-peer lending: An empirical study. In 15th Americas Conference on Information Systems 2009, AMCIS 2009 (pp. 132-138). (15th Americas Conference on Information Systems 2009, AMCIS 2009; Vol. 1).