Who Can Get Money? Evidence from the Chinese Peer-To-Peer Lending Platform

Information Systems Frontiers (Forthcoming)

42 Pages Posted: 3 Nov 2016 Last revised: 17 Mar 2017

See all articles by Qizhi Tao

Qizhi Tao

Southwestern University of Finance and Economics (SWUFE)

Yizhe Dong

University of Edinburgh Business School

Ziming LIN

Southwestern University of Finance and Economics

Date Written: March 12, 2017

Abstract

This paper explores how borrowers’ financial and personal information, loan characteristics and lending models affect peer-to-peer (P2P) loan funding outcomes. Using a large sample of listings from one of the largest Chinese online P2P lending platforms, we find that those borrowers earning a higher income or who own a car are more likely to receive a loan, pay lower interest rates, and are less likely to default. The credit grade assigned by the lending platform may not represent the creditworthiness of potential borrowers. We also find that the unique offline process in the Chinese P2P online lending platform exerts significant influence on the lending decision. We discuss the implications of our results for the design of big data-based lending markets.

Keywords: peer-to-peer (P2P) lending; Fintech, offline authentication; listing outcomes; information asymmetry; China

Suggested Citation

Tao, Qizhi and Dong, Yizhe and LIN, Ziming, Who Can Get Money? Evidence from the Chinese Peer-To-Peer Lending Platform (March 12, 2017). Information Systems Frontiers (Forthcoming), Available at SSRN: https://ssrn.com/abstract=2863360 or http://dx.doi.org/10.2139/ssrn.2863360

Qizhi Tao

Southwestern University of Finance and Economics (SWUFE) ( email )

55 Guanghuacun St,
Chengdu, Sichuan 610074
China

Yizhe Dong (Contact Author)

University of Edinburgh Business School ( email )

Old College
South Bridge
Edinburgh, Scotland EH8 9JY
United Kingdom

Ziming LIN

Southwestern University of Finance and Economics ( email )

55 Guanghuacun St,
Chengdu, Sichuan 610074
China

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