Affordable Credit Research Articles

The Incompatibilities of the Secured Transactions Law Reform in Nigeria with Access to Credit: What Did the Lawmakers Get Wrong?

In 2017, the Nigerian National Assembly passed the Secured Transactions in Movable Assets Act (STMA), which is predicated on the theoretical underpinnings of Article 9 of the U.S Uniform Commercial Code (UCC Article 9), precisely its unitary-functional approach to secured financing. The STMA claims that its overall aim is to expand access to affordable credit especially for individuals and small businesses. Yet, despite this laudable ambition, certain provisions of STMA significantly betray its aim and objectives, mainly due to the reformers ostensible lack of a proper understanding of STMA’s ancestry, i.e., the UCC Article 9 and its case law jurisprudence that has developed over a period of seven decades. One of STMA’s defects which largely ignore the realities faced by most of the small businesses and individuals in need of credit financing, is its requirement of them to provide an insurance cover as a precondition for concluding a valid security agreement. Similarly, its private enforcement mechanism which requires an advance notice as well as the unwise involvement of the Nigeria Police in repossession of collateral is problematic: this could be a fertile ground for more cases of police brutality and corrupt practices. Through a doctrinal analysis, comparing the STMA provisions with those of UCC Article 9, the paper shows how certain provisions of the former are inimical to its overall aim and objectives. The paper also suggests transplantable solutions that are likely to assist Nigerian lawmakers in reforming this important legislation.

Role of Cooperative Societies in Promoting Technopreneurship among Rural Women in Anambra State

The study investigated the role of cooperative societies in promoting technopreneurship among rural women in Anambra State. Two research questions guided the study. The descriptive research design was adopted for the study. The population of the study comprised all managers of cooperative societies in Anambra State. Through purposive sampling, the researcher selected 150 managers of cooperative societies in Anambra State. The instrument for data collection was a structured questionnaire developed by the researcher. The instrument was validated by experts in the field. The application of Cronbach Alpha reliability method on the obtained data yielded coefficient value of 0.88 for internal consistency. Data collected from the respondents were analyzed with mean. The findings of the study revealed that the roles of cooperative societies in promoting technopreneurship among rural women in Anambra State are that it empowers women to leverage technology effectively in their entrepreneurial endeavors, creates a conducive environment for women to develop and implement their innovative ideas and provides access to affordable credit facilities among others. The findings also revealed that the strategies that could by applied by cooperative societies in promoting technopreneurship among rural women in Anambra State include organizing training sessions and workshops specifically tailored to empower rural women with technopreneurship skills, offering financial support to rural women entrepreneurs by providing microloans or access to credit facilities and advocating for policies that support and empower rural women in technopreneurship among others. Based on these findings the researcher recommended among others that cooperative societies should organise training sessions and workshops aimed primarily at equipping rural women with entrepreneurial skills.

ЦИФРОВОЙ БАНК ДЛЯ ИНКЛЮЗИВНОГО ФИНАНСИРОВАНИЯ: ОПЫТ КИТАЯ

The article discusses the experience of WeBank, China's digital financial inclusion bank recognized as the best digital bank in the world. The indicators of WeBank's successful activity over the past five years are analyzed. It is revealed that the main clients of WeBank are socially vulnerable groups, small and medium-sized enterprises. The main success factors of WeBank have been identified and studied. They include digital innovation in customer service, development of the platform business model, social media integration, significant cost reduction, quick and affordable credit products, enhanced security measures, crossfunctional teamwork of employees, and regular research into user behavior. It is proposed to implement the Chinese digital banking experience in the Eurasian Economic Union member states.

Effect of livelihood diversification on poverty reduction among members of cooperative rural farmers in anambra state, nigeria

This study investigated the effect of livelihood diversification on poverty reduction among members of cooperative rural farmersin Anambra State, Nigeria. The specific objectives are to ascertain the extent to which craftsmanship, paid labour, trading,service delivery and asset income have influenced poverty reduction among members of cooperative rural farmers in Anambra State. The study was a descriptive survey on a sample 142 respondents. Data for the study were obtained using a structured questionnaire and was subsequently analyzed using frequency tables, percentages and regression technique of the ordinary least square. Findings revealed that craftsmanship, Paid labour, service delivery and asset income have significant influence on poverty reduction among members of cooperative rural farmers in Anambra State. The study concludes that four out of the five regression coefficient - craftsmanship, paid labour, trading and asset income - significantly influenced poverty reduction among members of cooperative rural farmers in Anambra State, Nigeria. Service delivery was not significant but it had positive relationship with poverty reduction among members of cooperative rural farmers in Anambra State thus suggesting inadequate service delivery businesses among members of cooperative societies. Based on the findings of the study, the following recommendations are made: Cooperative societies should educate members on livelihood diversification craft engagements to help lift their members from poverty. Cooperative societies should train their members on skills that will enable them seek rewarding paid labour as a means of diversifying their livelihood strategies. The societies should help members obtain adequate affordable credit to go into meaningful trading. This is because trade was found to significantly reduce poverty among members of cooperative rural farmers in Anambra State. Members of cooperative should consider going into service delivery business like financial services which is a trending business today. Apart from commercial building for renting and receiving royalty from farm land, members of cooperative should consider investment in Stocks and securities, real estate, franchise and crypto businesses.

Fostering Inclusive Growth in Indonesia: Evidence from Panel Regression Analysis

An inclusive development does not only rely on economic growth but also on the creation of equitable access to growth outcomes. Government spending has an important role in promoting efficiency and economic growth as well as equity. Meanwhile, financial inclusion is believed to be able to expand opportunities to contribute to growth. Previous studies have proven the influence of both on inclusive growth with varying results. This study aims to analyze the impact of government spending in the fields of health, education, economy, and social protection, as well as financial inclusion on inclusive growth. Using panel data from 34 provinces in Indonesia in 2015-2019, this study applies a random effects model. The results show that education spending and the level of financial inclusion can foster inclusive growth. This finding confirms that public investment in education will expand access to education to increase human capital and labor productivity, as well as competitiveness and wages, while the inclusiveness of financial services increases access to more affordable credit. On the other hand, economic spending has a negative impact on inclusive growth due to the development gap. Meanwhile, health and social protection spending have no impact on inclusive growth. The implication is that health and economic spending policies must be directed at ensuring people's access to more equitable economic opportunities. Monitoring and provision of a more active social assistance also needs to be improved.

Effects of vegetable production on income and livelihood of rural households in Nigeria

Aims: The growing level of food insecurity and poverty in developing nations, especially among rural households, requires more effort and measures to curb it. Engaging in vegetable production by rural households can play a significant role in alleviating poverty, improving their nutritional status and livelihood. This study, therefore, investigates the effect of vegetable production on rural farmers’ income and households’ livelihood in Nigeria.Methods and Results: Data collected from 400 vegetable farming households were analysed using descriptive statistics and multiple regression. The results revealed that vegetable farming is a female-dominated venture (89.4% females). The regression results revealed that vegetable output had a positive and significant effect on rural households’ income. Other factors that influenced farmers’ income were household size, access to credit and farm size. Furthermore, vegetable production had positive effects on rural households’ livelihood by providing employment, income, basic needs, food, paying for school fees, improving their nutritional status and standard of living. Pests and diseases, poor storage facilities, post-harvest loss, inadequate credit facilities, high cost of inputs, poor knowledge of irrigation, poor transportation and poor extension services were the severe constraints faced in vegetable production.Conclusions: It can be inferred that vegetable production contributed immensely to rural households’ economic status, livelihood and wellbeing. Although, the venture was faced with some challenges. Therefore, the provision of accessible and affordable credit facilities by banks, government and non-governmental organizations to the farmers is important as this would encourage them, curb most of the constraints and increase their income.Significance and Impact of the Study: Understanding the effects of vegetable production on the income and livelihoods of rural dwellers will enhance participation. Therefore, the outcome of this study would allow policymakers to intervene in its production in view to lower poverty and malnutrition, and improve rural households’ wellbeing.

Research Report on Financial Performance of MUDRA Yojna for the time period of 2015-2019

Pradhan Mantri Mudra Yojana (PMMY) is a flagship scheme of Government of India to “fund the unfunded” by bringing such enterprises to the formal financial system and extending affordable credit to them. It enables a small borrower to borrow from all Public Sector Banks such as PSU Banks, Regional Rural Banks and Cooperative Banks, Private Sector Banks, Foreign Banks, Micro Finance Institutions (MFI) and Non Banking Finance Companies (NBFC) for loans upto Rs 10 lakhs for non-farm income generating activities. The scheme was launched on 8th April, 2015 by the Hon'ble Prime Minister. In India many things revolve around mere perceptions, while getting into detail it often paint a different picture. It is a common misperception people have that large industries create more employment, though the truth is that “in India only 1.25 crore people find employment in large industries, whereas small enterprises employed 12 crore people”. In India, small businesses play an important role by providing employment to a large number of people. It is the second largest sector engaging uneducated and unskilled people after agriculture. Further, millions of low income earning group person aspire to set up small businesses but are unable to start, mostly due to credit limitations. Since banks do not find them eligible for credit loan. After identifying the importance of self employment people and small business units, government of India launched MUDRA Yojana to address the financial and other constraints. This paper is an attempt to know about the MUDRA Yojana and its key objectives. The paper highlights the role and importance of MUDRA bank towards small business units, it also review the Mudra yojna for the year of 2015-2019 in terms of many aspects.

Analyzing the Impact of Financial Resilience on the Lives of Individuals and Household Post Covid-19 in Indian Economy

Purpose: Economic crisis is a global phenomenon. When the crisis hits, many people are affected. This paper is an attempt to analyze the impact of financial resilience on the lives of individuals and households. In this study we analyze what are common financial shocks that individuals can face and how they tend to cope with this and our recommendations.
 Methodology: Literature review and comparative study of consumption and consumer credit across diverse market.
 Main Findings: The intensity of the economic crisis may vary from one person to another, depending on the individual financial resilience. Some households are less resilient to financial shocks than others. This may be because they have low levels of savings, have limited access to affordable credit, already hold high levels of debt or lack the skills required to manage household budgets.
 Implications: Financial resilience is difficult to estimate because it is a dynamic concept – the ability to recover quickly from an income or expenditure shock. Savings are in anticipation to the challenges face which might hinder the achievement of financial goals, hence there is a scope for new saving/investment products which are more comprehensive in nature.
 Novelty: We over a period have witnessed that there is a social support to the society during economic crisis but what is required is organization resilience rather than developing personal capabilities. The resilience should go beyond financial vulnerabilities and encompass mental stability, emotional wellbeing, education attainment etc.

Drought characteristics and pastoralists’ response strategies in Korahey zone, Somali regional state, Eastern Ethiopia

Recurrent drought has deteriorated the ecosystem, eroded and jeopardized livelihood assets of pastoralists general in Ethiopia and specifically in the Korahey zone. Therefore, this study was undertaken to characterize the drought and to identify adaptation and coping strategies employed by the Korahey pastoral community as responses to drought. Standardized precipitation indexes (SPI) of annual rainfall were calculated for 35 years by using Precintcon Package R Studio to characterize drought in the study area. Household surveys and interviews were also done on 216 randomly selected sample households. In addition to these, key informant interviews, focus group discussions and field observations were also used and the data were analyzed by using multiple response tests on Statistical Package for Social Science (SPSS). The results revealed that near-normal SPI values were recorded in the years 1984–2014 and drought frequency has increased particularly starting from 2015. The result of SPI shows that severely dry and moderately dry SPI values occurred in 2015–2016 and 2017, respectively. Severe drought observed causes negative impacts on the livestock which is the livelihood base of most pastoralists in the zone. The result revealed that mobility, herd diversification, livestock off-take and the increasing number of drought adapting livestock were adaptation strategies whereas herd splitting, household splitting, labor migration to town and charcoal and fuel-wood selling were coping strategies to drought. Additionally, emergency aid, veterinary services, safety net and credit services were also some of the drought response mechanisms given by NGOs and the government. The result indicates that drought response strategies desired by pastoralists were being constrained by inadequate capital of households (81.2%), lack of affordable credit services (72.9%) and conflicts (70.8%). The study provides valuable information which helps strategies for local capacity building and emphasis increasing attention to pastoralists at the policy level. Generally, the findings suggest that policies and development interventions in pastoral areas are critical complements to the existing pastoral strategies for increased household resilience to drought.

Modeling the Adoption and Intensity of Climate-smart Maize Varieties in Embu County, Kenya: Double Hurdle Approach

This paper examines the determinants of adoption and intensity of climate-smart maize varieties (CSMVs) in Embu county of Kenya using primary data. A total sample of 550 respondents were sampled through a multistage and systematic random sampling techniques. Data were analyzed using descriptive statistics and a double hurdle model. The results indicated that the level of awareness was 86 percent while the adoption rate was 63 percent. The results further indicated that land size, land ownership, size of the family, contact to extension officer, and previous yield had a significant influence on the intensity of adoption. Thus the results justifies the need for promotion of not only awareness but also widespread adoption of climate-smart maize varieties both locally and nationally. It is therefore recommended that, adequate policies and development programs for promoting use of climate-smart maize varieties in Kenya should be directed towards input and output delivery, land under climate-smart maize varieties, extension service provision, affordable credit, education and age mechanism that are more effective and youth oriented initiatives.

Financial Sector Development and Economic Growth Nexus: Empirical Evidence from Sierra Leone

The study examines the nexus between financial sector development and economic growth in Sierra Leone over the period 1980-2018. The stationarity test result shows that the order of integration of variables included in the model was a mixture of I (0) and I (1). Therefore, the study employs the bounds testing approach to Cointegration and error correction models developed within the Autoregressive Distributed Lag (ARDL) framework to explore the long-and short-run effects of financial sector development on economic growth. The study uses two different measures of financial development including, credit to the private sector and broad money. The study also investigates whether there are other determinants of economic growth. Evidence of short-run dynamics was found amongst the various financial development indicators and economic growth. The results showed that credit to the private sector and broad money influenced economic growth in the short-run. Again, inflation and government consumption expenditure were found to impede economic growth in the short-run. Contrarily, Gross capital formation and FDI were found to stimulate economic growth in the short-run. The study recommends that policy makers should take caution in the choice of financial development indicator as a policy instrument for the attainment of growth and development. Again on the basis of empirical evidence, policies to improve the accessibility of affordable credit by the private sector, including small and medium scale enterprises should be enforced

Smallholders’ adoption of climate-smart practices in Konso, Ethiopia

ABSTRACT Adoption of Climate-Smart-Agriculture (CSA) practices by smallholder farmers in the UNESCO-designated cultural landscape of Konso is assessed using household survey data, focus groups and key informant interviews. A multinomial logit model reveals that the main determinants of adoption of terracing, agroforestry and intercropping were education, size of landholding, income, access to climate information, credit, and extension services. Despite the farmers’ best efforts, food security is increasingly constrained by unreliable rainfall. External support in the form of reliable regular weather forecasts, affordable credit and crop insurance would support local livelihoods and the sustainability of the indigenous farming system.

Determinants of Financial Capability: A Situational Analysis for Namibia

It is imperative that if the poor in society benefit from the massive developments in the financial sector, then such a sector must be genuinely inclusive. It should meet the needs of all citizens with the potential to use such financial services productively. This paper scopes financial inclusivity as a process ensuring ease of access, availability, and usage of financial services by all members of society. To reduce socio-economic inequality, the poor in developing countries, like everyone else, need access to a wide range of financial services that are convenient, flexible, and reasonably priced. Therefore, financial inclusivity is sought to be significant towards the global development agenda as a tool for increasing the poor’s access to financial services, often cited as a mechanism that can help reduce poverty and lower income inequality. For many years, microfinance has been heralded as a mechanism for enhancing financial inclusion. It provides an avenue through which the marginalized and the poor can access and benefit from the formal financial system. Moreover, financial inclusivity is substantially evident in the rural areas among the poor, who have no collateral or credit history for participating in the legal financial system. As a result, financial inclusion is receiving increased attention as an essential tool for reducing aspects of socio-economic inequality characterized by the isolation of individuals and communities from formal financial services, like affordable and accessible credit.

Editors’ Introduction

Thematically this issue centers representation and responsiveness of state entities. The three articles featured offer distinctive methodological approaches to understanding community and representation throughout the diaspora. Our first article “From Complexity to Clarity: A Network Approach to Better Understanding Issues on a Black- Interest Agenda” by Periloux Peay and John Rackey seeks to uncover trends that members of the Congressional Black Caucus (CBC) use to discuss, define, and prioritize issues on their agenda and if they approach these issues as interconnected, multidimensional, and complex. As you read the article please appreciate the detailed social network analysis incorporated to examine the context and effort of CBC members to communicate and identify issues of relevance to the Black community and into an institutional agenda.Our next article by Caroline Hossein moves us through the diaspora to the Caribbean. In “The Legacy of Cooperatives among the African Diaspora: The Cases of Haiti and Grenada”, Hossein explores financial cooperatives in both Haiti and Grenada by using interviews with bankers and individuals to gain deeper insight into the role these institutions play in the lives of citizens. These institutions are significant to our understanding of politics throughout the diaspora because persons who interact with these economic institutions counter similar exclusions that people of African descent in the United States face such as limited access to savings, affordable credit and access to business loans due to limited collateral. Hossein’s research helps us to understand fully that these economic alternatives are based in grassroots community solutions to meet needs that are influenced by politicized economic policy decisions.Our final research article by Rasel Madaha “A study of Local Government in Africa through Participatory Action Research (PAR)” focuses on Tanzania. The Tanzanian government has established new local governments to increase efficiency in the provision of services. By using a case study model, Madaha seeks to understand how the presence of a well-established ruling regime at the local and central government levels tends to ignore the needs of marginalized people in Tanzania. The author’s methodology allows for interview participants to not only inform the researcher of their experiences but to also allow for participants to clearly identify problems for further research exploration. By employing this type of qualitative method Madaha is able to articulate in detail the marginalization of women and the complexity of providing opportunities in agricultural communities.We applaud the outstanding research the authors present in this issue. The articles presented exhibit our mission to explore the international links of African Americans and the diasporic community. We hope that you will continue to see the National Review of Black Politics as a home for your dynamic scholarship.

IMMIGRANT INCOMES AND CREDIT

Immigrants to Canada earn more the longer they live here. Their incomes are also influenced by factors including official language fluency, immigration category, and racial discrimination. In this article we address one factor – access to affordable credit. Immigrants consume almost half of their savings in moving to Canada. This can leave little leftover to pay for recertification or licensing fees. Newcomers with professional accreditations earned outside Canada who cannot recertify or become licensed on their arrival often find work that is not commensurate with their training. This is a loss to both immigrants and those born in Canada who might benefit from their skills. Small, low-interest loans, or “microcredit” may be one way to achieve faster certification. The figure on the right shows data from Windmill Microlending, a registered charity providing microloans to immigrants. Red dots represent the income of an immigrant loan recipients (red) and non-recipients (green) measured against their time in Canada. The lines show the average rise in pay for immigrants the longer they live in Canada. On average, loan recipients receive a 26% increase in income following disbursement and a faster rate of increase in income over time.

Coconut Growers Knowledge, Perception and Adoption on Impacts of Climate Change in Gampaha and Puttalam Districts in Sri Lanka: An Index-Based Approach

Climate change and food security are critical topics in sustainable agricultural development. Climate change is expected to have serious environmental, economic and social impacts on Sri Lanka. Coconut growers’ knowledge, perception level and adoption for climate change adaptation measures have influenced productivity of the coconut cultivation. The study investigated the coconut growers’ knowledge gap, knowledge and perception levels regarding impacts of climate change in Gampaha and Puttalam districts. Further, this study investigated their adoption of different adaptation measures. A stratified random sampling technique was applied for selecting 240 respondents from two different districts. Structured questionnaire and interview schedule were used to elicit information from the respondents and data was analyzed with both descriptive and inferential statistics. Adoption rate of the climate change adaptation measures is significantly influenced by coconut growers’ knowledge and perception level at varying degrees. The study revealed that most of the growers in two study areas have better knowledge (> 70%) and perceptions (>60%) regarding the gradual changes in the climate and its impact on their coconut cultivation. However, their adaptation behavior is fairly poor (< 50%) in both districts. Hence government policies should more focused on to coconut growers to have access to affordable credit to increase their ability and flexibility to change adaptation strategies in response to the changing climatic conditions. Increasing growers’ access to agricultural extension services and access to information on weather forecasting are very important. In addition, government should improve and promote off-farm income-earning opportunities during dry seasons.

Unlocking the commercialization potentials of Moringa oleifera production in Southwestern Nigeria

Despite the importance of Moringa oleifera tree for food security at the smallholder farmers’ level, there is no consolidated socioeconomic information about the crop such as its contribution to household food security and income, and its production potential, commercialization and constraints. This study estimated the commercialization level and factors influencing the level of commercialization among the moringa farmers. Data were analyzed using descriptive and inferential statistics. A double-hurdle model with quasi-maximum likelihood fractional response model was employed to analyze the participation and level of participation in commercialization among smallholder moringa farmers in Southwestern Nigeria. The commercialization level was captured by the household commercialization index (HCI) which was calculated as the ratio of the value of marketed moringa output to the value of moringa produced. The result revealed that half of the moringa farmers are still operating at the subsistence level with a large number of them at the low-medium level while the rest are high-level market participants. The participation in commercialization of moringa was influenced by age and square of household head age, marital status, level of education, farming experience in moringa farming, and access to market information. In the same vein, age and age square of household head, level of education, access to credit and extension services were factors influencing the level of commercialization. Thus, the study concluded that access to affordable credit, adequate access to extension services and prompt market information for small-scale farmers would not only improve their production capacity but also serve as a driver for market participation. The study recommends that for the enormous potential of the moringa tree species and its various products to be harnessed, stakeholders, NGOs, and policymakers should, through adequate extension services, widely promote and scale up the domestication of the miracle tree.

Psychological capital and climate change adaptation: Empirical evidence from smallholder farmers in South Africa.

There are calls for better empirical models to inform climate change adaptation in smallholder agriculture. Hitherto adaptation studies have failed to comprehensively integrate non-cognitive behavioural factors (e.g. psychological capital), and there is also no common framework for measuring non-cognitive abilities of smallholder farmers. Hence, this study is the first attempt to assess how psychological capital affects climate change adaptation amongst smallholder farmers. The study estimated the multivariate probit regression model using data collected from 328 smallholder farmers in KwaZulu-Natal province, South Africa. The results show an association between some psychological capital indicators and smallholder adaptation decisions. Social networks, having multiple farming objectives, access to credit and the type of farmer (irrigators vs. non-irrigators) were also significant in determining smallholders’ adaptation decisions. In conclusion, the study recommends the need for practical ways for enhancing smallholders’ endowment with key non-cognitive abilities. There is also a need for researchers to develop a comprehensive framework for assessing non-cognitive factors critical for climate change adaptation. This will improve the use of positive psychology theories to advance the literature on climate change adaptation. Support should also be provided to communities facing higher risks of climate change adaptation. More focus should also be given to improve smallholder farmers’ ability to adapt, including access to affordable credit. The role of social networks in information sharing remains critical, and hence their promotion should be prioritised. The findings on multiple objectives in farming were unique to climate change adaptation research, and hence the indicator should be considered in future similar studies.

THE ROLE OF MARKETING MIX STRATEGIES IN CONSUMER CONVENIENCE OF RURAL BANKS IN NORTH SUMATERA

<p>Rural Banks has the opportunity to increase third party fund in the form of saving and pension credit distribution. Both purposes can be achieved by increasing pensioner customers who make Rural Banks the paymaster of their pension fund. If this problem did not meet the solution or the right handling, it might increase the stagnant customers so that Rural Banks would lose the opportunity to increase third party fund and profit from loan distributed. The purpose of this study was to find out the marketing mix factor that most influence to the customer convenience at the Rural Banks . This is intended to help formulate a marketing strategy to attract customer to become product customer and increase Rural Banks, saving and credit volume. In this study, the method used was survey approach. The type of this study was quantitative descriptive and the nature of this study was descriptive explanatory. Data collection method was carried out using questionnaire and documentation. The data analysis used was multiple regression. Simultaneously, the result showed that the price variable had no effect on the customer convenience to become a customer at the Rural Banks, but the location variable had a strong influence on the decision to become a product customer at the Rural Banks. Product, location, promotion, price, person, and process variables simultaneously had a positive and significant effect on the increase the number of retirees at Rural Banks. This showed that with product offered according to need, location that was easy to reach, attractive promotion, employees who were friendly and working well, a fast process and affordable credit interest rates could boost the positive impact on increasing the number of customers at the Rural Banks, .</p>

How Does Online Lending Influence Bankruptcy Filings?

By providing quick and easy access to credit, online lending platforms may help borrowers overcome financial setbacks and/or refinance high-interest debt, thereby decreasing bankruptcy filings. On the other hand, these platforms may cause borrowers to overextend themselves financially, leading to a “debt trap” and increasing bankruptcy filings. To investigate the impact of online lending on bankruptcy filings, we leverage variation in when state regulators granted approval for a major online lending platform—Lending Club—to issue peer-to-peer loans. Using a difference-in-differences approach, we find that state approval of Lending Club led to an increase in bankruptcy filings. A complementary instrumental variables analysis using loan-level data yields similar results. We find suggestive evidence that the ease of receiving a Lending Club loan causes some borrowers to overextend themselves financially, leading to bankruptcy. Our results suggest that recent initiatives from online lending platforms to control how borrowers use loans, such as Lending Club’s “balance transfer loans” that send loan funds directly to creditors, can help these platforms provide safe and affordable credit. Our study adds to the literature that examines how online platforms influence society and the economy; it contributes to the literature that examines how financial products, services, and regulations influence bankruptcy filings; and it has policy implications for online lending design and regulation. This paper was accepted by Lorin Hitt, information systems.