Peer-to-Peer Crowdfunding: Information and the Potential for Disruption in Consumer Lending

Adair Morse ()
Additional contact information
Adair Morse: Haas School of Business, University of California, Berkeley, California 94720; and National Bureau of Economic Research, Cambridge, Massachusetts 02138

Annual Review of Financial Economics, 2015, vol. 7, issue 1, 463-482

Abstract: Can peer-to-peer lending (P2P) disintermediate and mitigate information frictions in lending so that choices and outcomes for at least some borrowers and investors are improved? I offer a framing of issues and survey the nascent literature on P2P. On the investor side, P2P disintermediates an asset class of consumer loans, and investors may be able to capture rents associated with the removal of a layer of financial intermediation. Risk and portfolio choice questions linger prior to any inference. On the borrower side, evidence suggests that proximate knowledge (direct or inferred) unearths soft information. Thus, P2P may be able to offer pricing and/or access benefits to potential borrowers. Early research suggests that the future of consumer lending will involve more big data and reintermediation of underwriting by all types of financial institutions. I ask many more questions than current research can answer, hoping to motivate future research.

Keywords: crowdfunding; disintermediation; marketplace finance; peer-to-peer lending; screening; social finance (search for similar items in EconPapers)
JEL-codes: G21 G23 (search for similar items in EconPapers)
Date: 2015
References: Add references at CitEc
Citations: View citations in EconPapers (70)

Downloads: (external link)
http://dx.doi.org/10.1146/annurev-financial-111914-041939 (application/pdf)
Full text downloads are only available to subscribers. Visit the abstract page for more information.

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:anr:refeco:v:7:y:2015:p:463-482

Ordering information: This journal article can be ordered from
http://www.annualreviews.org/action/ecommerce

Access Statistics for this article

More articles in Annual Review of Financial Economics from Annual Reviews Annual Reviews 4139 El Camino Way Palo Alto, CA 94306, USA.
Bibliographic data for series maintained by http://www.annualreviews.org ().