IDEAS home Printed from https://ideas.repec.org/a/eee/reveco/v93y2024ipap38-51.html
   My bibliography  Save this article

Peer-to-peer lending for individual and MSME finance: Evidence from an original survey in China

Author

Listed:
  • Liu, Yajing
  • Fujiwara, Kenya
  • Jinushi, Toshiki

Abstract

This study analyzes peer-to-peer (P2P) lending, a new financing tool for micro, small, and medium enterprises (MSMEs) and individuals, in terms of its relationship with existing financing tools. We conducted a survey of P2P borrowers in China and analyzed the factors that influenced their preference for P2P loans. A key finding was that both business and individual borrowers having difficulties with traditional financing methods—such as the young and women, persons without collateral, and newly established firms—prefer P2P lending. Furthermore, individual borrowers are drawn by the preferential terms in the P2P loan contracts, while business borrowers are not.

Suggested Citation

  • Liu, Yajing & Fujiwara, Kenya & Jinushi, Toshiki, 2024. "Peer-to-peer lending for individual and MSME finance: Evidence from an original survey in China," International Review of Economics & Finance, Elsevier, vol. 93(PA), pages 38-51.
    • Handle: RePEc:eee:reveco:v:93:y:2024:i:pa:p:38-51
    DOI: 10.1016/j.iref.2024.02.038
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1059056024001151
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.iref.2024.02.038?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Galema, Rients, 2020. "Credit rationing in P2P lending to SMEs: Do lender-borrower relationships matter?," Journal of Corporate Finance, Elsevier, vol. 65(C).
    2. Thakor, Anjan, 2020. "Corrigendum to: Fintech and Banking: What Do We Know?," Journal of Financial Intermediation, Elsevier, vol. 43(C).
    3. 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.
    4. Cuiqing Jiang & Zhao Wang & Ruiya Wang & Yong Ding, 2018. "Loan default prediction by combining soft information extracted from descriptive text in online peer-to-peer lending," Annals of Operations Research, Springer, vol. 266(1), pages 511-529, July.
    5. Seth M. Freedman & Ginger Zhe Jin, 2011. "Learning by Doing with Asymmetric Information: Evidence from Prosper.com," NBER Working Papers 16855, National Bureau of Economic Research, Inc.
    6. Huan Tang, 2019. "Peer-to-Peer Lenders Versus Banks: Substitutes or Complements?," The Review of Financial Studies, Society for Financial Studies, vol. 32(5), pages 1900-1938.
    7. Lee, In & Shin, Yong Jae, 2018. "Fintech: Ecosystem, business models, investment decisions, and challenges," Business Horizons, Elsevier, vol. 61(1), pages 35-46.
    8. Chen Xiang Liu, 2007. "SME financing in China," EconomiX Working Papers 2007-29, University of Paris Nanterre, EconomiX.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Xia, Yanchun & Qiao, Zhilin & Xie, Guanghua, 2022. "Corporate resilience to the COVID-19 pandemic: The role of digital finance," Pacific-Basin Finance Journal, Elsevier, vol. 74(C).
    2. Murinde, Victor & Rizopoulos, Efthymios & Zachariadis, Markos, 2022. "The impact of the FinTech revolution on the future of banking: Opportunities and risks," International Review of Financial Analysis, Elsevier, vol. 81(C).
    3. Wang, Yao & Drabek, Zdenek & Wang, Zhengwei, 2022. "The role of social and psychological related soft information in credit analysis: Evidence from a Fintech Company," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 96(C).
    4. Sun, Xiaoyan & Xie, Xuanli, 2024. "How does digital finance promote entrepreneurship? The roles of traditional financial institutions and BigTech firms," Pacific-Basin Finance Journal, Elsevier, vol. 85(C).
    5. Ruyi Ge & Juan Feng & Bin Gu, 2016. "Borrower’s default and self-disclosure of social media information in P2P lending," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 2(1), pages 1-6, December.
    6. Doumpos, Michalis & Zopounidis, Constantin & Gounopoulos, Dimitrios & Platanakis, Emmanouil & Zhang, Wenke, 2023. "Operational research and artificial intelligence methods in banking," European Journal of Operational Research, Elsevier, vol. 306(1), pages 1-16.
    7. Yinhong Yao & Jianping Li, 2022. "Operational risk assessment of third-party payment platforms: a case study of China," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 8(1), pages 1-20, December.
    8. Kowalewski, Oskar & Pisany, Paweł, 2022. "Banks' consumer lending reaction to fintech and bigtech credit emergence in the context of soft versus hard credit information processing," International Review of Financial Analysis, Elsevier, vol. 81(C).
    9. Liu, Shiyu & Wang, Bo & Zhang, Qianqian, 2024. "Fintech regulation and bank liquidity creation: Evidence from China," Pacific-Basin Finance Journal, Elsevier, vol. 84(C).
    10. Chen, S. & Doerr, S. & Frost, J. & Gambacorta, L. & Shin, H.S., 2023. "The fintech gender gap," Journal of Financial Intermediation, Elsevier, vol. 54(C).
    11. Huang, Shuo, 2022. "Does FinTech improve the investment efficiency of enterprises? Evidence from China’s small and medium-sized enterprises," Economic Analysis and Policy, Elsevier, vol. 74(C), pages 571-586.
    12. Paul Beaumont & Huan Tang & Éric Vansteenberghe, 2024. "Collateral Effects: The Role of FinTech in Small Business Lending [Effets collatéraux : le rôle des Fintechs dans le financement des petites et moyennes entreprises]," Débats économiques et financiers 42, Banque de France.
    13. Tianlei Pi & Haoxuan Hu & Jingyi Lu & Xue Chen, 2022. "The Analysis of Fintech Risks in China: Based on Fuzzy Models," Mathematics, MDPI, vol. 10(9), pages 1-13, April.
    14. Hwa-Sung Kim, 2023. "Effects of ambiguity on innovation strategies," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 9(1), pages 1-27, December.
    15. Li, Yuelei & Hao, Aiting & Zhang, Xiaotao & Xiong, Xiong, 2018. "Network topology and systemic risk in Peer-to-Peer lending market," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 508(C), pages 118-130.
    16. Wang, Xiaoting & Hou, Siyuan & Kyaw, Khine & Xue, Xupeng & Liu, Xueqin, 2023. "Exploring the determinants of Fintech Credit: A comprehensive analysis," Economic Modelling, Elsevier, vol. 126(C).
    17. Tan, Changchun & Mo, Lingyu & Wu, Xiaomeng & Zhou, Peng, 2024. "Fintech development and corporate credit risk: Evidence from an emerging market," International Review of Financial Analysis, Elsevier, vol. 92(C).
    18. Hou, Xiaohui & Yang, Rui, 2024. "Bank digital transformation and liquidity mismatch: Evidence from China," International Review of Economics & Finance, Elsevier, vol. 92(C), pages 581-597.
    19. Hiranya Dissanayake & Catalin Popescu & Anuradha Iddagoda, 2023. "A Bibliometric Analysis of Financial Technology: Unveiling the Research Landscape," FinTech, MDPI, vol. 2(3), pages 1-16, August.
    20. Wang, Haijun & Mao, Kunyuan & Wu, Wanting & Luo, Haohan, 2023. "Fintech inputs, non-performing loans risk reduction and bank performance improvement," International Review of Financial Analysis, Elsevier, vol. 90(C).

    More about this item

    Keywords

    Peer-to-peer lending; Individual and MSME finance; Borrowers; Online platform; China;
    All these keywords.

    JEL classification:

    • 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
    • G40 - Financial Economics - - Behavioral Finance - - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:reveco:v:93:y:2024:i:pa:p:38-51. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/620165 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.