The Gender Gap in Peer-to-Peer Lending: Evidence from the People’s Republic of China

35 Pages Posted: 21 Feb 2020

See all articles by Xiao Chen

Xiao Chen

The Chinese University of Hong Kong (CUHK)

Bihong Huang

Asian Development Bank Institute

Dezhu Ye

Jinan University

Date Written: July 10, 2019

Abstract

We document and analyze the gender gap in the online credit market. Using data from Renrendai, a leading peer-to-peer lending platform in the People’s Republic of China (PRC), we show that lending to female borrowers is associated with better loan performance, including a lower probability of default, a higher expected profit, and a lower expected loss than for their male peers. However, despite the higher creditworthiness, we don’t find any measurable gender impact on funding success rate, meaning that female borrowers have to compensate lenders by providing higher profitability to achieve a similar funding probability to their male peers. This evidence indicates the existence of a gender gap that discriminates against female borrowers. Further analysis implies that this gender gap is independent of the amount of information disclosed by borrowers.

Keywords: P2P lending, gender gap, loan performance

JEL Classification: G21, J16, G20

Suggested Citation

Chen, Xiao and Huang, Bihong and Ye, Dezhu, The Gender Gap in Peer-to-Peer Lending: Evidence from the People’s Republic of China (July 10, 2019). ADBI Working Paper 977, Available at SSRN: https://ssrn.com/abstract=3541481 or http://dx.doi.org/10.2139/ssrn.3541481

Xiao Chen (Contact Author)

The Chinese University of Hong Kong (CUHK)

Shatin, N.T.
Hong Kong
Hong Kong

Bihong Huang

Asian Development Bank Institute ( email )

Kasumigaseki Building 8F
3-2-5, Kasumigaseki, Chiyoda-ku
Tokyo, 100-6008
Japan

Dezhu Ye

Jinan University ( email )

Huang Pu Da Dao Xi 601, Tian He District
Guangzhou, Guangdong 510632
China

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