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  1. The performance of marketplace lenders
    evidence from lending club payment data
    Author: Kräussl, Roman; Kräussl, Zsofia; Pollet, Joshua M.; Rinne, Kalle
    Published: [2018]
    Publisher:  Center for Financial Studies, Goethe University, Frankfurt am Main, Germany

    Direct financing of consumer credit by individual investors or non-bank institutions through an implementation of marketplace lending is a relatively new phenomenon in financial markets. The emergence of online platforms has made this type of... more

    Location:
    ZBW - Leibniz-Informationszentrum Wirtschaft, Standort Kiel
    Signature:
    DS 108 (598)
    Inter-library loan:
    No inter-library loan

     

    Direct financing of consumer credit by individual investors or non-bank institutions through an implementation of marketplace lending is a relatively new phenomenon in financial markets. The emergence of online platforms has made this type of financial intermediation widely available. This paper analyzes the performance of marketplace lending using proprietary cash flow data for each individual loan from the largest platform, Lending Club. While individual loan characteristics would be important for amateur investors holding a few loans, sophisticated lenders, including institutional investors, usually form broad portfolios to benefit from diversification. We find high risk-adjusted performance of approximately 40 basis points per month for these basic loan portfolios. This abnormal performance indicates that Lending Club, and similar marketplace lenders, are likely to attract capital to finance a growing share of the consumer credit market. In the absence of a competitive response from traditional credit providers, these loans lower costs to the ultimate borrowers and increase returns for the ultimate lenders.

     
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    Source: Union catalogues
    Language: English
    Media type: Book
    Format: Online
    Other identifier:
    hdl: 10419/182455
    Series: CFS working paper series ; no. 598
    Scope: 1 Online-Ressource (circa 34 Seiten), Illustrationen
  2. The performance of marketplace lenders
    Author: Kräussl, Roman; Kräussl, Zsofia; Pollet, Joshua M.; Rinne, Kalle
    Published: [2023]
    Publisher:  Center for Financial Studies, Goethe University, Frankfurt am Main, Germany

    We analyze the performance of marketplace lending using loan cash flow data from the largest platform, Lending Club. We find substantial risk-adjusted performance of about 40 basis points per month for the entire loan portfolio. Other loan portfolios... more

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    Location:
    ZBW - Leibniz-Informationszentrum Wirtschaft, Standort Kiel
    Signature:
    DS 108
    Inter-library loan:
    No inter-library loan

     

    We analyze the performance of marketplace lending using loan cash flow data from the largest platform, Lending Club. We find substantial risk-adjusted performance of about 40 basis points per month for the entire loan portfolio. Other loan portfolios grouped by risk category have similar risk-adjusted performance. We show that characteristics of the local bank sector for each loan, such as concentration of deposits and the presence of national banks, are related to the performance of loans. Thus, marketplace lending has the potential to finance a growing share of the consumer credit market in the absence of a competitive response from the traditional incumbents.

     
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    Source: Union catalogues
    Language: English
    Media type: Book
    Format: Online
    Other identifier:
    hdl: 10419/270845
    Series: CFS working paper series ; no. 706
    Subjects: Marketplace lending; household finance; financial intermediation; financial innovation; competition
    Scope: 1 Online-Ressource (circa 55 Seiten), Illustrationen