How Does P2P Lending Fit into the Consumer Credit Market?

32 Pages Posted: 3 Apr 2016 Last revised: 20 Nov 2016

Calebe de Roure

Reserve Bank of Australia

Loriana Pelizzon

Goethe University Frankfurt - Faculty of Economics and Business Administration; Goethe University Frankfurt - Research Center SAFE; Ca Foscari University of Venice

Paolo Tasca

UCL Centre for Blockchain Technologies

Multiple version iconThere are 2 versions of this paper

Date Written: April 20, 2016

Abstract

Why do retail consumers look for P2P financial intermediation? Are internet-based peer-to-peer (P2P) loans a substitute for or a complement to bank loans? In this study we answer these questions by comparing P2P lending with the non-construction consumer credit market in Germany. We show that P2P lending is servicing a slice of the consumer credit market neglected by banks, namely high-risk and small-sized loans. Nevertheless, when accounting for the risk differential, interest rates are very similar. Our conclusion is that P2P lending is substituting the banking sector for high-risk consumer loans since banks are unwilling or unable to supply this slice of the market. Our study serves to show where the institutionalization of credit provision has left a slice of the market unsupplied.

Keywords: P2P lending, financial intermediation, consumer credit

JEL Classification: D40, G21, G23, L86

Suggested Citation

de Roure, Calebe and Pelizzon, Loriana and Tasca, Paolo, How Does P2P Lending Fit into the Consumer Credit Market? (April 20, 2016). Available at SSRN: https://ssrn.com/abstract=2756191 or http://dx.doi.org/10.2139/ssrn.2756191

Calebe De Roure (Contact Author)

Reserve Bank of Australia

65, Martin Place
Sydney, NSW 2000
Australia

Loriana Pelizzon

Goethe University Frankfurt - Faculty of Economics and Business Administration ( email )

Theodor-W.-Adorno-Platz 3
Frankfurt am Main, D-60323
Germany

Goethe University Frankfurt - Research Center SAFE ( email )

Theodor-W.-Adorno-Platz 3
Frankfurt am Main, 60323
Germany

HOME PAGE: http://www.safe-frankfurt.de

Ca Foscari University of Venice ( email )

Dorsoduro 3246
Venice, Veneto 30123
Italy

Paolo Tasca

UCL Centre for Blockchain Technologies ( email )

Gower Street
London, WC1E 6BT
United Kingdom

HOME PAGE: http://paolotasca.com

Register to save articles to
your library

Register

Paper statistics

Downloads
438
rank
34,346
Abstract Views
1,373
PlumX