Emergence of Financial Intermediaries in Electronic Markets: The Case of Online P2P Lending
Year: 2009
Type: article
Abstract: We analyze the role of intermediaries in electronic markets using detailed data of more than 14,000 originated loans on an electronic P2P (peer-to-peer) lending platform. In such an electronic credit market, lenders bid to supply a private loan. Screening of potential borrowers and the monitoring of loan repayment can be delegated to designated group leaders. We find that these market participants act as financial intermediaries and significantly improve borrowers’ credit conditions by reducing information asymmetries, predominantly for borrowers with less attractive risk characteristics. Our findings may be surprising given the replacement of a bank by an electronic marketplace.
Source: BuR - Business Research
DOI: 10.1007/bf03343528
Authors: Sven C. Berger, Fabian Gleisner
Institution: Goethe University Frankfurt
Language: English
Subfield: Management Information Systems
Domain: Social Sciences
Open Access status: gold
Estimated APC paid: $1,535
OpenAlex ID: W2034097067