Online Peer-to-Peer Lending - A Literature Review

The term online peer-to-peer lending (P2P) describes the loan origination process between private individuals on online platforms where financial institutions operate only as intermediates required by law. Initialized by groups in online social networks, first commercial online P2P lending platforms...

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Published inJournal of internet banking and commerce : JIBC Vol. 16; no. 2; p. 1
Main Authors Bachmann, Alexander, Becker, Alexander, Buerckner, Daniel, Hilker, Michel, Kock, Frank, Lehmann, Mark, Tiburtius, Phillip, Funk, Burkhardt
Format Journal Article
LanguageEnglish
Published Ottawa ARRAY Development 01.08.2011
Subjects
Banking
Commercial credit
Credit bureaus
Demographics
Electronic banking
Financial institutions
Interest rates
Lines of credit
Literature reviews
Loan originations
Peer to peer computing
Peer to peer lending
Stakeholders
Studies
Success
United States > US
Germany
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Summary:The term online peer-to-peer lending (P2P) describes the loan origination process between private individuals on online platforms where financial institutions operate only as intermediates required by law. Initialized by groups in online social networks, first commercial online P2P lending platforms started in 2005. Thus online P2P lending is a relatively young research field. This paper gives a brief overview of the P2P lending market and reviews the research on the determinants of P2P lending. The authors distinguish between financial and demographic characteristics of the borrower, as well as social characteristics like friends and group affiliation. The reviewed literature gives insights on how the determinants affect the borrowers' likelihood of successful funding, the final interest rate that has to be paid as well as the relationship of the borrowers' characteristics and lending success.
ISSN:1204-5357
1204-5357