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Marketplace lending and consumer credit outcomes: evidence from prosper

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  • Timothy Dore
  • Traci Mach

Abstract

In 2005, Prosper launched the first peer-to-peer lending website in the US, allowing for consumers to apply for and receive loans entirely online. To understand the effect of this new credit source, we match application-level data from Prosper to credit bureau data. Post application, borrowers’ credit scores increase and their credit card utilization rates fall relative to non-borrowers in the short run. In the longer run, total debt levels for borrowers are higher than those of non-borrowers. Despite increased debt levels relative to non-borrowers, delinquency rates for borrowers are significantly lower.

Suggested Citation

  • Timothy Dore & Traci Mach, 2022. "Marketplace lending and consumer credit outcomes: evidence from prosper," Applied Economics, Taylor & Francis Journals, vol. 54(4), pages 390-405, January.
    • Handle: RePEc:taf:applec:v:54:y:2022:i:4:p:390-405
    DOI: 10.1080/00036846.2021.1962514
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    Cited by:

    1. Tetyana Balyuk, 2023. "FinTech Lending and Bank Credit Access for Consumers," Management Science, INFORMS, vol. 69(1), pages 555-575, January.

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