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Disparity and discrimination in consumer credit markets: Evidence from online peer-to-peer lending

Author

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  • Jiang, Yu
  • Fang, Xianming
  • Wang, Zijun

Abstract

We provide fresh evidence on demographics-based discrimination in credit markets by analyzing transaction level data from a large peer-to-peer (P2P) lending platform in the Chinese market. Despite the wisdom of the lending crowds, the online market displays both statistical and taste-based discriminations. Women are more likely than men to obtain funding and pay less for loans. Applicants with less education, falling into the low-income group, or employed in low-paying industries are less likely to get loans and generally pay higher rates. Married borrowers fare better than their unmarried counterparts. The evidence on the relationship between competition and discrimination is mixed.

Suggested Citation

  • Jiang, Yu & Fang, Xianming & Wang, Zijun, 2024. "Disparity and discrimination in consumer credit markets: Evidence from online peer-to-peer lending," Pacific-Basin Finance Journal, Elsevier, vol. 83(C).
    • Handle: RePEc:eee:pacfin:v:83:y:2024:i:c:s0927538x23003086
    DOI: 10.1016/j.pacfin.2023.102237
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    More about this item

    Keywords

    Peer-to-peer; P2P lending; Discrimination; Disparities; Credit markets;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • J71 - Labor and Demographic Economics - - Labor Discrimination - - - Hiring and Firing
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination

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