From Credit Risk to Social Impact: On the Funding Determinants in Interest-Free Peer-to-Peer Lending

Gregor Dorfleitner (), Eva-Maria Oswald and Rongxin Zhang
Additional contact information
Gregor Dorfleitner: University of Regensburg
Eva-Maria Oswald: University of Regensburg
Rongxin Zhang: University of Regensburg

Journal of Business Ethics, 2021, vol. 170, issue 2, No 11, 375-400

Abstract: Abstract Based on a unique data set on US direct microloans, we study the funding determinants of interest-free peer-to-peer crowdlending aimed at borrowers in the US. By performing logistic regressions on funding success and Tobit regressions on the reversed funding time, the existence of a social underwriting by a third-party trustee and information in the description texts fostering the investors’ trust are shown to be the main predictors of successful funding. Regarding social impact, the possibility to empower women and groups of borrowers appeals to the investors, whereas empowerment of the family or community beyond the borrowers themselves appears to remain unappreciated. When examining the vulnerability of the borrowers as a predictor, the results manifest differences amongst the attitudes of the investors towards social impact. In the subsample of non-endorsed loans, the investors appear to prefer to support borrowers with an immigration background. In contrast, this is not the case with endorsed loans.

Keywords: Text analysis; Crowdlending; Microfinance; Funding probability; Funding time (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

Downloads: (external link)
http://link.springer.com/10.1007/s10551-019-04311-8 Abstract (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:kap:jbuset:v:170:y:2021:i:2:d:10.1007_s10551-019-04311-8

Ordering information: This journal article can be ordered from
http://www.springer. ... cs/journal/10551/PS2

DOI: 10.1007/s10551-019-04311-8

Access Statistics for this article

Journal of Business Ethics is currently edited by Michelle Greenwood and R. Edward Freeman

More articles in Journal of Business Ethics from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().