How does P2P lending fit into the consumer credit market?

Arbeitspapier

Why do retail consumers look for P2P financial intermediation? Are internetbased peer-to-peer (P2P) loans a substitute for or a complement to bank loans? In this study we answer these questions by comparing P2P lending with the nonconstruction consumer credit market in Germany. We show that P2P lending is servicing a slice of the consumer credit market neglected by banks, namely highrisk and small-sized loans. Nevertheless, when accounting for the risk differential, interest rates are very similar. Our conclusion is that P2P lending is substituting the banking sector for high-risk consumer loans since banks are unwilling or unable to supply this slice of the market. Our study serves to show where the institutionalization of credit provision has left a slice of the market unsupplied.

Object Details

• ISBN: 978-3-95729-286-5
• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Bundesbank Discussion Paper ; No. 30/2016

Classification and Topics

• Classification: Wirtschaft ; Market Structure, Pricing, and Design: General ; Banks; Depository Institutions; Micro Finance Institutions; Mortgages ; Pension Funds; Non-bank Financial Institutions; Financial Instruments; Institutional Investors ; Information and Internet Services; Computer Software
• Subject: P2P lending ; financial intermediation ; consumer credit

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): de Roure, Calebe ; Pelizzon, Loriana ; Tasca, Paolo
• Event: Veröffentlichung
• (who): Deutsche Bundesbank
• (where): Frankfurt a. M.
• (when): 2016

Further information

• Handle: http://hdl.handle.net/10419/144836
• Last update: 10.03.2025, 11:43 AM CET