How does P2P lending fit into the consumer credit market?

Calebe de Roure, Loriana Pelizzon () and Paolo Tasca

No 30/2016, Discussion Papers from Deutsche Bundesbank

Abstract: Why do retail consumers look for P2P financial intermediation? Are internetbased peer-to-peer (P2P) loans a substitute for or a complement to bank loans? In this study we answer these questions by comparing P2P lending with the nonconstruction consumer credit market in Germany. We show that P2P lending is servicing a slice of the consumer credit market neglected by banks, namely highrisk and small-sized loans. Nevertheless, when accounting for the risk differential, interest rates are very similar. Our conclusion is that P2P lending is substituting the banking sector for high-risk consumer loans since banks are unwilling or unable to supply this slice of the market. Our study serves to show where the institutionalization of credit provision has left a slice of the market unsupplied.

Keywords: P2P lending; financial intermediation; consumer credit (search for similar items in EconPapers)
JEL-codes: D40 G21 G23 L86 (search for similar items in EconPapers)
Date: 2016
New Economics Papers: this item is included in nep-ban
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (36)

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Persistent link: https://EconPapers.repec.org/RePEc:zbw:bubdps:302016

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