Success Factors in Peer-to-Business (P2B) Crowdlending: A Predictive Approach

Emma Berenguer,Carlos Sanchis-Pedregosa,Antonio-M Moreno-Moreno

doi:10.1109/access.2019.2946858

Emma Berenguer, Carlos Sanchis-Pedregosa + Show 1 more

Open Access

https://doi.org/10.1109/access.2019.2946858

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Journal: IEEE Access	Publication Date: Jan 1, 2019
Citations: 10	License type: CC BY 4.0

Affiliation: Universidad Pablo de Olavide, Universidad de Sevilla

Abstract

Peer-to-Business (P2B) crowdlending is gaining importance among companies seeking funding. However, not all projects get the same take-up by the crowd. Thus, this study aims to determine the key factors that drive non-professional investors to choose a given loan in an online environment. To this purpose, we have analyzed 243 crowdlending campaigns on October.eu platform. We have obtained a series of variables from the analyzed loans using logistic regression. Results indicate that loan amount, loan term and overall credit rating are the key predictors of non-professional lender P2B crowdlending success. These findings may be useful for predicting whether the crowd will subscribe to a loan request or not. This information would help businesses to modify specific loan characteristics (if possible) to make their loans more attractive or could even lead companies to consider a different financial option. It could also help platforms select and adapt project parameters to secure their success.

Highlights

In recent years, businesses around the world have dealt with credit restriction from banks due to the financial crisis
We obtained a set of data related to the loans, which were subsequently analyzed using logistic regression with the backward stepwise method in order to highlight key factors for lenders
Binary Logistic regression (LR) has been used to obtain a predictive model based on our dataset. This methodology is appropriate for the analysis as our objective is to determine key aspects that lead to successful campaigns and, as has been stated previously, as we are working with a dichotomous dependent variable

Summary

Introduction

Businesses around the world have dealt with credit restriction from banks due to the financial crisis. In this scenario, multiple sources of alternative financing have appeared driven by new technologies and the internet. Several different ways of crowdfunding can be observed on public online platforms that link entrepreneurs and backers [3], [4]. Through these platforms, a large number of investors with relatively small amounts of money can either enter as partners (equity crowdfunding) or act as lenders (crowdlending) [5]. The most popular is crowdlending [6]

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