Work

The Impact of Peer-to-Peer Lending on Small Business Loans

Year: 2022

Type: article

Abstract: We investigate the impact of peer-to-peer lending on the small business loans originated by US depository institutions that are subject to the Community Reinvestment Act. We present a model where a borrower can choose between a traditional bank and a crowdlending platform and show that the entry of crowdlending can induce a switching effect as well as a credit expansion effect. Using the staggered entry of LendingClub across states between 2009 and 2017, we find that the platform entry reduced the small business loans originated by banks, in particular, in the low- or moderate-income tracts as well as in the distressed middle-income tracts with a high poverty rate. A conservative estimate suggests that the crowdlending entry may have reduced the aggregate lending volume to small businesses.

Source: Journal of Economics and Business

DOI: 10.1016/j.jeconbus.2026.106307

Authors: Jin-Hyuk Kim, Frank Stähler

Institutions: University of Colorado Boulder, Ifo Institute for Economic Research, The University of Adelaide, University of Tübingen

Language: English

Topic: FinTech, Crowdfunding, Digital Finance

Subfield: Management Information Systems

Field: Business, Management and Accounting

Domain: Social Sciences

SDG: Decent work and economic growth

Open Access status: hybrid

Estimated APC paid: $2,560