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Influencing Factors of Online P2P Lending Success Rate in China

Author

Listed:
  • Zhuopei Yang

    (Shanghai Nuclear Engineering Research and Design Institute)

  • Yanmei Zhang

    (Central University of Finance and Economics)

  • Hengyue Jia

    (Central University of Finance and Economics)

Abstract

The low success rate of lending is the main drawback of development of online P2P lending platforms in China. Based on the theory of social capital, this study analysed the influence factors of success rate of P2P lending platform in China, using social network method and multiple linear regression model. Soft information, such as bidding record, has been creatively employed to study the corresponding topics. Data used in this study comes from the largest online P2P lending platform in China. The results show that: compared with other influence factors, the bidding record has a more significant effect on the success rate, and the users depend more on the social capital; the bidding records reduce the asymmetry of information, and help increasing the success rate of lending and decreasing the cost of online P2P lending.

Suggested Citation

  • Zhuopei Yang & Yanmei Zhang & Hengyue Jia, 2017. "Influencing Factors of Online P2P Lending Success Rate in China," Annals of Data Science, Springer, vol. 4(2), pages 289-305, June.
    • Handle: RePEc:spr:aodasc:v:4:y:2017:i:2:d:10.1007_s40745-017-0103-6
    DOI: 10.1007/s40745-017-0103-6
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    References listed on IDEAS

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    1. Iyer, Rajkamal & Khwaja, Asim Ijaz & Luttmer, Erzo F. P. & Shue, Kelly, 2009. "Screening in New Credit Markets: Can Individual Lenders Infer Borrower Creditworthiness in Peer-to-Peer Lending?," Working Paper Series rwp09-031, Harvard University, John F. Kennedy School of Government.
    2. 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. Chong, Zhaohui & Wei, Xiaolin, 2023. "Exploring the spatial linkage network of peer-to-peer lending in China," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 630(C).
    2. Jiang, Cuixia & Xu, Qifa & Zhang, Weiming & Li, Mengting & Yang, Shanlin, 2018. "Does automatic bidding mechanism affect herding behavior? Evidence from online P2P lending in China," Journal of Behavioral and Experimental Finance, Elsevier, vol. 20(C), pages 39-44.

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