Network Formation and Financial Inclusion in P2P Lending: A Computational Model

What characteristics of fintech lending platforms improve access to funding and increase financial inclusion? We build a computational model platform that is used study the endogenous loan network formation process on platform. Given multidimensional nature inclusion, we address what factors influence number loans, level investment/debt, how those relate distribution investment/debt across agents. find scale SME reach are essential in determining loans However, willingness accept risks main driver behind value loans. also increased scale, high-risk thresholds, low-interest rates lead more evenly distributed investments. Moreover, large help diversity power among peers. conclude digital helping foster investment achieve egalitarian allocation resources. These results can guide new theory development about impact P2P inequality as well promote inclusion.