The Role of Gender and Education in Peer-to-peer Lending Activities: Evidence from a European Cross-country Study

Abstract

The wide use of peer-to-peer lending platforms coupled with the Fintech global race has emphasized the role of social lending activities and their impact on consumers in recent years. Starting from the publicly available Bondora database, we analyse determinants of loan default during the 2013-2021 period by studying individual economic and social factors of borrowers. We apply a Logit model to estimate the ex-post probability of default on both original variables provided by the database and factors obtained by Principal Component Analysis. Results show the fundamental role of borrowers’ education in reducing the probability of default, as with financial awareness obtained by loan characteristics. In addition, gender plays an important role in determining loan default, with a particular focus on women's conditions within the family. Regarding financial inclusion and its social implications, our findings suggest different ways to improve financial literacy and promote peer-to-peer lending.