Abstract

This paper investigates the extent to which the structure of the local credit market, in terms of the presence and lending capacity of traditional banks, shapes the growth and local outreach of peer-to-peer lending. Our study reveals that areas that are financially undeserved by the traditional banking system experience higher growth of peer-to-peer lending. The growth of peer-to-peer lending is more pronounced in areas with lower presence of small banks. Furthermore, we show that the local growth of peer-to-peer lending is associated with lower risk of borrower default. Our findings show that online marketplaces benefit borrowers through improving their credit scores.

Talk to us

Join us for a 30 min session where you can share your feedback and ask us any queries you have

Schedule a call

Disclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.