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From One Crisis to Another: Impact of COVID-19 Pandemic on Peer-to-Peer Lending Market

In: Financial Transformations Beyond the COVID-19 Health Crisis

Author

Listed:
  • Asror Nigmonov
  • Hussein Daradkeh

Abstract

This chapter empirically examines the liquidity risk experienced by peer-to-peer (P2P) lending market during the COVID-19 pandemic. This study utilizes time series and survival regression analyses to provide early evidence of the pandemic-induced exposure to liquidity risk in the P2P lending market. We use the daily number of listings and the probability of success in Bondora’s secondary market as continuous dependent variables. The findings indicate that the secondary market listings substantially increased around the early days of the pandemic. Using the method of survival analysis, we also find that, despite increased volatility, the probability of successful listing increased during the pandemic period. Our findings improve the current risk management models and security mechanisms used by P2P lending platforms. However, the findings of this chapter should be used with caution because of the limitations imposed by third parties and rapid changes occurring in the industry.

Suggested Citation

  • Asror Nigmonov & Hussein Daradkeh, 2022. "From One Crisis to Another: Impact of COVID-19 Pandemic on Peer-to-Peer Lending Market," World Scientific Book Chapters, in: Sabri Boubaker & Duc Khuong Nguyen (ed.), Financial Transformations Beyond the COVID-19 Health Crisis, chapter 13, pages 363-402, World Scientific Publishing Co. Pte. Ltd..
    • Handle: RePEc:wsi:wschap:9781800610781_0013
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    Keywords

    COVID19; Pandemic; Pandemic Outbreak; Health Crisis; Economics; Macroeconomics; Finance; Sustainable Finance; Financial Crisis; Financial Integration; Economic Integration; Global Financial Crisis; Financial Institutions; Corporate Finance; Corporate Governance; Board of Directors; ESG; Corporate Social Responsibility; Sustainable Finance; Stock Markets; Financial Markets; Stock Market Behaviour; Firm Liquidity; Emerging Markets; China; Financial Institutions; Money; Banks; Banking System; Banking Sector; Business Groups; Resilience; Safe Heaven; Gold; Oil; Peer-to-Peer Lending Market; Foreign Trading; Stock Market Volatility; Extreme Events;
    All these keywords.

    JEL classification:

    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • G3 - Financial Economics - - Corporate Finance and Governance
    • F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance
    • F62 - International Economics - - Economic Impacts of Globalization - - - Macroeconomic Impacts
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • G17 - Financial Economics - - General Financial Markets - - - Financial Forecasting and Simulation

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