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

Pejman Abedifar, Hossein Doustali and Steven Ongena
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Pejman Abedifar: University of St Andrews; Khatam University
Hossein Doustali: Khatam University

No 23-78, Swiss Finance Institute Research Paper Series from Swiss Finance Institute

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 (search for similar items in EconPapers)
JEL-codes: D14 E51 G2 Q54 (search for similar items in EconPapers)
Pages: 48 pages
Date: 2023-09
New Economics Papers: this item is included in nep-ban, nep-env, nep-mfd and nep-pay
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Persistent link: https://EconPapers.repec.org/RePEc:chf:rpseri:rp2378

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