Overcharged or fair play? Exploring interest rates and profitability in debt-based crowdfunding

Ehsan Ghasemi, Nima Vafai and Alireza Sheikh-Zadeh

Journal of Business Venturing Insights, 2024, vol. 22, issue C

Abstract: •The key insight of this study is that risk-controlled profitability scoring in debt-based crowdfunding can promote fairer loan pricing and funding opportunities for entrepreneurs.•Interest rates assigned to high-risk loans exceed compensation for their default probability.•High-probability-of-default borrowers offer higher profitability than low-risk ones.•Risk-controlled profitability models outperform probability-of-default-based models.•New profitability predictors independent of risk predictors were identified.

Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jobuve:v:22:y:2024:i:c:s235267342400060x

DOI: 10.1016/j.jbvi.2024.e00508

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