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Shaping crowdlending investors’ trust: Technological, social, and economic exchange perspectives

Author

Listed:
  • Arif Perdana

    (Data Science Programme, Monash University Indonesia)

  • Pearpilai Jutasompakorn

    (Business, Communication and Design Cluster, Singapore Institute of Technology)

  • Sunghun Chung

    (School of Business, George Washington University)

Abstract

The rise of crowdlending enables small firms to borrow capital where transaction costs are reduced and financial accessibility is improved. Crowdlending platforms require lenders to depend solely on the information provided by its borrowers. Such information reliance could impact lenders’ financial behavior and investment decision and return. In this study, we develop a model to understand what elements and factors influence the formation of trust in crowdlending. Our results suggest that lenders are likely to pay more attention to platform quality and risk mitigation strategy than attractive loan cues. Our findings can aid the crowdlending industry in growing its investor base and increasing potential customers’ access to capital. These findings could also assist in developing regulatory guidelines in the crowdlending market.

Suggested Citation

  • Arif Perdana & Pearpilai Jutasompakorn & Sunghun Chung, 2023. "Shaping crowdlending investors’ trust: Technological, social, and economic exchange perspectives," Electronic Markets, Springer;IIM University of St. Gallen, vol. 33(1), pages 1-17, December.
    • Handle: RePEc:spr:elmark:v:33:y:2023:i:1:d:10.1007_s12525-023-00650-7
    DOI: 10.1007/s12525-023-00650-7
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    More about this item

    Keywords

    Crowdlending; Fintech; Financial technology; Social exchange theory; Trust; Peer-to-peer lending;
    All these keywords.

    JEL classification:

    • F34 - International Economics - - International Finance - - - International Lending and Debt Problems
    • G29 - Financial Economics - - Financial Institutions and Services - - - Other
    • L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software

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