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A primer on peer-to-peer lending: immediate financial intermediation in practice

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Peer-to-peer (P2P) lending markets are young but fast-growing. Furthermore, P2P lending competes with traditional bank lending. Several questions arise: How big are fintech credit markets currently? How do the most common P2P lending models work? What are the risks and who bears them? How do platforms try to mitigate information asymmetries between lenders and borrowers? Who is using P2P platforms? Will P2P lending replace traditional bank lending in the future? This article addresses these issues and summarizes the empirical research on the topic, with a particular focus on developments in Austria.

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  • Wolfgang Pointner & Burkhard Raunig, 2018. "A primer on peer-to-peer lending: immediate financial intermediation in practice," Monetary Policy & the Economy, Oesterreichische Nationalbank (Austrian Central Bank), issue Q3/18, pages 36-51.
    • Handle: RePEc:onb:oenbmp:y:2018:i:q3/18:b:3
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    1. Rajkamal Iyer & Asim Ijaz Khwaja & Erzo F. P. Luttmer & Kelly Shue, 2016. "Screening Peers Softly: Inferring the Quality of Small Borrowers," Management Science, INFORMS, vol. 62(6), pages 1554-1577, June.
    2. Dorfleitner, Gregor & Priberny, Christopher & Schuster, Stephanie & Stoiber, Johannes & Weber, Martina & de Castro, Ivan & Kammler, Julia, 2016. "Description-text related soft information in peer-to-peer lending – Evidence from two leading European platforms," Journal of Banking & Finance, Elsevier, vol. 64(C), pages 169-187.
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    4. Barasinska Nataliya & Schäfer Dorothea, 2014. "Is Crowdfunding Different? Evidence on the Relation between Gender and Funding Success from a German Peer-to-Peer Lending Platform," German Economic Review, De Gruyter, vol. 15(4), pages 436-452, December.
    5. Thomas Jud & Jürgen Marchart & Klaus S. Friesenbichler & Michael Peneder & Stefan Haslinger, 2013. "Risikokapital in Österreich. Angebots- und nachfrageseitige Erklärungen der geringen Ausprägung und Empfehlungen zu ihrer Überwindung," WIFO Studies, WIFO, number 46677, April.
    6. Freedman, Seth & Jin, Ginger Zhe, 2017. "The information value of online social networks: Lessons from peer-to-peer lending," International Journal of Industrial Organization, Elsevier, vol. 51(C), pages 185-222.
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    Cited by:

    1. Doris Ritzberger-Grünwald & Helmut Stix, 2018. "How Austrians bank and pay in an increasingly digitalized world – results from an OeNB survey," Monetary Policy & the Economy, Oesterreichische Nationalbank (Austrian Central Bank), issue Q3/18, pages 52-89.

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    More about this item

    Keywords

    fintech; peer-to-peer lending; crowd funding; bank lending;
    All these keywords.

    JEL classification:

    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation

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