Does Peer‐to‐Peer Lending Have Resilience During the COVID‐19 Pandemic? Evidence From China

Ziwei Wang, Haijun Yang and Harris Wu

International Journal of Finance & Economics, 2025, vol. 30, issue 4, 3901-3917

Abstract: Does Peer‐to‐Peer (P2P) lending, a digital FinTech platform, show resilience in response to COVID‐19 shocks? We examine this question by considering both the absorbing and adapting abilities based on psychological perceptions and objective infection cases. We collect data on infection cases, the Baidu search index, and 54,166 textual news articles to propose a novel perspective that incorporates both subjective psychological perceptions and objective infection cases to measure the response of P2P lending firms to COVID‐19 shocks. We calculate the extent of P2P lending's resilience using four metrics: maximum loss, total loss, recovery periods, and net impacts from local projections impulse responses. Our findings demonstrate that P2P lending displays resilience, as its total trade volume, new investors, and new investments initially decrease slightly and then rebound in response to the COVID‐19 shock. Psychological perception of COVID‐19 shocks, rather than objective infection, elicits a more pronounced response in the performance of P2P lending firms.

Date: 2025
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