This paper reviews peer-to-peer (P2P) lending, its development in the UK and other countries, and assesses the business and economic policy issues surrounding this new form of intermediation. P2P platform technology allows direct matching of borrowers’ and lenders’ diversification over a large number of borrowers without the loans having to be held on an intermediary balance sheet. P2P lending ...

This paper examines the effects of corruption and government control of the banking system on the sensitivity of commercial lending rates to changes in international financial market conditions. Using a sample of 18 countries located in the Western hemisphere (the “Americas”), we find that most countries’ lending rates are insensitive to changes in international financial market conditions. Onl...

We build a simple dynamic model to investigate the sequential group lending's ability to resolve the ex-ante moral hazard and under-monitoring problems among group members in comparison with simultaneous group lending. We found that the interest rates proposed by the lender are critical to the analytical results. If the interest rate is under certain parameter conditions, both the leader member...

Regulators express growing concern over “predatory lending,” which we take to mean lending that reduces the expected utility of borrowers. We present a rational model of consumer credit in which such lending is possible and we identify the circumstances in which it arises with and without competition. Predatory lending is associated with imperfect competition, highly collateralized loans and po...

Background: We examine the signaling effect of borrowers’ social media behavior, especially self-disclosure behavior, on the default probability of money borrowers on a peer-to-peer (P2P) lending site. Method: We use a unique dataset that combines loan data from a large P2P lending site with the borrower’s social media presence data from a popular social media site. Results: Through a natural e...

I test for the existence of a bank lending channel of monetary policy transmission. I identify bank lending channel effects with a simple model of bank behavior incorporating longterm customer relationships. The model suggests that when a large fraction of bank assets is held in loans, contractionary monetary policy shocks are more likely to cause a cutback in bank lending, in turn reducing rea...

This paper explores how bank characteristics and the institutional environment influence the composition of banks’ loan portfolios. Using a new data set based on the recent EBRD Banking Environment and Performance Survey (BEPS), which was conducted in 2005 for 220 banks in 20 transition countries, we show that bank characteristics such as ownership and size are important determinants of bank cu...

Tujuan dari penelitian ini adalah untuk mengetahui apakah P2P Lending dapat menggantikan atau menjadi pelengkap Bank dalam kegiatan pelayanan keuangan ke UMKM dan memberikan alternatif solusi, baik bagi maupun yang menyediakan layanan KUR. Lokasi di Kabupaten Pesawaran. Populasi seluruh ada Teknik pengambilan sampel menggunakan cluster random sampling , yaitu dengan tahap (1) Membagi Pesawaran ...

This paper estimates the relationship between banking market concentration and high-risk portfolio strategies at commercial banks. I use the unprecedented changes in the degree of competition in local banking markets that occurred after 1980 to estimate the impact of market competition on the risk profile of commercial bank lending. I find evidence that increasing concentration has been associa...

Debtor-in-Possession (DIP) financing is a unique form of financing that is allowed to firms filing under Chapter 11 of the US Bankruptcy Code. The legal provisions confer enhanced seniority on this financing. It is argued that such financing leads to excessive investment in risky, (even negative NPV) projects. Defenders of DIP financing, on the other hand, argue that it allows funding for posit...