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Lending in the crowd, receivables in decline: P2P lending and trade credit

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  • Nguyen, Dat Thanh
  • Tran, Vuong Thao
  • Phan, Dinh Hoang Bach

Abstract

This study examines how peer-to-peer (P2P) lending affects firm-level trade credit provision. Using U.S panel data from 2012 to 2020, we find that higher state-level P2P activity is associated with reduced trade credit, consistent with a substitution effect. We further document that P2P lending lowers firm-level sales volatility by improving customer liquidity, thereby reducing the need for trade credit as a demand-smoothing tool. The effect is more pronounced in consumer-facing sectors, SMEs, and financially constrained firms, highlighting the important influence of FinTech on informal finance.

Suggested Citation

  • Nguyen, Dat Thanh & Tran, Vuong Thao & Phan, Dinh Hoang Bach, 2025. "Lending in the crowd, receivables in decline: P2P lending and trade credit," Finance Research Letters, Elsevier, vol. 86(PD).
    • Handle: RePEc:eee:finlet:v:86:y:2025:i:pd:s1544612325019099
    DOI: 10.1016/j.frl.2025.108655
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    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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