A process model on P2P lending

Huaiqing Wang,Kun Chen,Wei Zhu,Zhenxia Song

doi:10.1186/s40854-015-0002-9

Huaiqing Wang, Kun Chen + Show 2 more

Open Access

https://doi.org/10.1186/s40854-015-0002-9

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Abstract

Abstract Background Online peer-to-peer lending (P2P lending) is booming as the popularity of e-finance. To develop a conceptual model for the P2P lending process is great valuable for managers to tack the issues of marketing, management and operation. Methods In this paper, we focus on the P2P lending process model and provide a comparative analysis comparing with traditional bank loan process. Results Firstly, our model shows that the information flow in P2P lending is more frequent and transparent. Secondly, the model reveals that P2P lending uses a quite different credit audition method, which relies on information and the decision model in the P2P systems. Thirdly, the loan management is not complete normally in P2P lending, because most P2P companies do not have the post-loan records of borrowers. Conclusions These findings inspire future studies and practices on P2P lending process and key technologies.

Highlights

Online peer-to-peer lending (P2P lending) is booming as the popularity of e-finance (Kiisel 2013; Berger and Gleisner 2009)
We will focus on the P2P lending process model and provide a comparative analysis compared with traditional bank loan process on both aspects of money flow and information flow
The other reason is P2P lending allows lenders to choose a borrower, so the information flow is more complex than bank loan

Summary

Introduction

Online peer-to-peer lending (P2P lending) is booming as the popularity of e-finance (Kiisel 2013; Berger and Gleisner 2009). This innovative financial activity refers to unsecured direct loans between lenders and borrowers through online platforms without the intermediation of any financial institutions (Lin et al 2013; Greiner and Wang 2010; Sorbe 2009). Compared with traditional bank loans, P2P lending has its own features. Lenders make direct investments on the lending website, and they can learn the detailed information about online borrowers.

Results

Conclusion