From One Crisis to Another: Impact of COVID-19 Pandemic on Peer-To-Peer Lending Market

Forthcoming, Financial Transformations beyond the Covid-19 Health Crisis. World Scientific Publishing.

Posted: 30 Nov 2020

See all articles by Asror Nigmonov

Asror Nigmonov

UNSW Business School

Hussein Daradkeh

University of Southern Queensland

Date Written: November 26, 2020

Abstract

This chapter empirically examines the liquidity risk experienced by P2P lending market during the COVID-19 pandemic. This study utilises time series and survival regression analyses to provide early evidence of the pandemic induced exposure to liquidity risk in the peer-to-peer lending market. We use the daily number of listings and the probability of success in Bondora’s secondary market as continuous dependent variables. The findings indicate that the secondary market listings substantially increased around the early days of the pandemic. Using the method of survival analysis, we also find that despite increased volatility, the probability of successful listing increased during the period of the pandemic. Our findings improve the current risk management models and security mechanisms used by P2P lending platforms. However, the findings of this chapter should be used with caution because of the limitations imposed by third parties and rapid changes happening in the industry.

Keywords: Peer-to-peer, Pandemic, COVID-19, Crowdfunding, Lending markets, Europe, Financial distress, Bondora, FinTech, Liquidity risk

Suggested Citation

Nigmonov, Asror and Daradkeh, Hussein, From One Crisis to Another: Impact of COVID-19 Pandemic on Peer-To-Peer Lending Market (November 26, 2020). Forthcoming, Financial Transformations beyond the Covid-19 Health Crisis. World Scientific Publishing., Available at SSRN: https://ssrn.com/abstract=3738075 or http://dx.doi.org/10.2139/ssrn.3738075

Asror Nigmonov (Contact Author)

UNSW Business School ( email )

UNSW Business School
High St
Sydney, NSW 2052
Australia

Hussein Daradkeh

University of Southern Queensland ( email )

P.O.Box 238 Darling Heights
Toowoomba, Queensland 4350
Australia

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