Why do peer-to-peer (P2P) lending platforms fail? The gap between P2P lenders' preferences and the platforms’ intentions

ABSTRACT: In the current study, we examine why peer-to-peer (P2P) lending platforms play only a minor role in the finance industry in Israel, compared to the traditional banking system. We conducted two studies and attempted to discover if a discrepancy exists between the lenders' preferences and the platforms’ incentives. In the first study, we conducted a conjoint analysis to examine the impact of lenders' decisions to invest through P2P platforms. The second study examines the factors in which platforms use to determine the lending interest rate for loans. We found that although lenders wish to decrease their risk and guarantee their investment, P2P companies encourage riskier borrowers. This contradiction between the priorities of the lenders and those of the platforms may explain why the non-us

SUBMITTER: Klein G 

PROVIDER: S-EPMC8210520 | biostudies-literature | 2021 Jun

REPOSITORIES: biostudies-literature