How the Economic Policy Uncertainty (EPU) impacts FinTech: The implication of P2P lending markets

Fuqin Zhou, Chang, Aichih (Jasmine) and Jim Shi

Finance Research Letters, 2024, vol. 70, issue C

Abstract: This study investigates the impact of state-level Economic Policy Uncertainty (EPU) on FinTech lending marketplace. Leveraging two large-scale Peer-to-Peer (P2P) datasets of LendingClub and Prosper from 2010 to 2019 alongside the news-based EPU index, we unveil a causal relationship between the EPU and both the interest rates and loan amounts. Economically, a one-standard-deviation increase in EPU causes 4.49 and 8.90 basis points change in P2P loan rates, and 1.56% and 1.28% variation in loan amounts, for LendingClub and Prosper, respectively. Furthermore, the national-sourced EPU has a relatively stronger effect on LendingClub, while the state-sourced EPU imposes more impacts on Prosper.

Keywords: FinTech; Economic policy uncertainty (EPU); P2P; LendingClub; Prosper (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:70:y:2024:i:c:s1544612324012972

DOI: 10.1016/j.frl.2024.106268

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