Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/262369 
Year of Publication: 
2022
Citation: 
[Journal:] Pakistan Journal of Commerce and Social Sciences (PJCSS) [ISSN:] 2309-8619 [Volume:] 16 [Issue:] 2 [Publisher:] Johar Education Society, Pakistan (JESPK) [Place:] Lahore [Year:] 2022 [Pages:] 222-235
Publisher: 
Johar Education Society, Pakistan (JESPK), Lahore
Abstract: 
The development of network technology has prompted the gradual rise of lending platforms, which not only meet the borrowing needs of the long-tail population, but also provide new investment methods for investors with idle funds. However, behind the rapid development of P2P online lending is accompanied by increasingly prominent risk issues. Using a Probit model and a dataset of 337,634 loan listings from a leading Chinese online Peer-to-Peer (P2P) lending platform (i.e., Renrendai platform), we investigate whether high-risk investors contribute to online P2P loan default risks and interest rates. Our empirical results show that, with 1% increase in the percentage of high-risk investors in a loan, the likelihood of loan default would increase by 0.79% and the loan's interest rate would increase by 4%. Our analysis suggests that the percentage of high-risk investors should be considered in online P2P lending risk management. To the best of our knowledge, this is the first paper to study the impact of fund providers' risk attitude on the online P2P lending market
Subjects: 
P2P lending
high-risk investors
default risks
interest rates
China
Creative Commons License: 
cc-by-nc Logo
Document Type: 
Article

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