Marketplace Lending: A Resilient Alternative in the Face of Natural Disasters?

48 Pages Posted: 7 Sep 2023

See all articles by Pejman Abedifar

Pejman Abedifar

University of St Andrews - School of Management; Khatam University - Tehran Institute for Advanced Studies; Khatam University

Hossein Doustali

Khatam University

Steven Ongena

University of Zurich - Department Finance; Swiss Finance Institute; KU Leuven; NTNU Business School; Centre for Economic Policy Research (CEPR)

Date Written: September 5, 2023

Abstract

What is the role played by marketplace lending after natural disasters? Analyzing a sample of more than one and a half million observations from Lending Club around the 33 worst natural disasters that occurred between 2013 and 2017, we find that there is an increase in the demand for marketplace loans by almost 10%. Yet, the platform does not restrict lending to individuals in the affected areas, nor do we observe an increase in interest rates. Interestingly, the performance of borrowers who receive loans after a natural disaster is not significantly different from the borrowers during normal times, indicating that the platform is competent at efficiently meeting the extra loan demand.

Keywords: Marketplace Lending, FinTech, Natural Disasters, Access to Finance, Credit Risk Assessment

JEL Classification: D14, E51, G2, Q54

Suggested Citation

Abedifar, Pejman and Doustali, Hossein and Ongena, Steven R. G., Marketplace Lending: A Resilient Alternative in the Face of Natural Disasters? (September 5, 2023). Swiss Finance Institute Research Paper No. 23-78, Available at SSRN: https://ssrn.com/abstract=4563649 or http://dx.doi.org/10.2139/ssrn.4563649

Pejman Abedifar

University of St Andrews - School of Management ( email )

The Gateway, North Haugh
St Andrews, Fife KY16 9RJ
United Kingdom

Khatam University - Tehran Institute for Advanced Studies ( email )

Tehran
Iran

Khatam University

Tehran
Iran

Hossein Doustali

Khatam University

Steven R. G. Ongena (Contact Author)

University of Zurich - Department Finance ( email )

Schönberggasse 1
Zürich, 8001
Switzerland

Swiss Finance Institute

c/o University of Geneva
40, Bd du Pont-d'Arve
CH-1211 Geneva 4
Switzerland

KU Leuven ( email )

Oude Markt 13
Leuven, Vlaams-Brabant 3000
Belgium

NTNU Business School ( email )

Norway

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
127
Abstract Views
774
Rank
414,458
PlumX Metrics