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Conference Paper: The effects of lender-borrower communication on P2P lending outcomes

TitleThe effects of lender-borrower communication on P2P lending outcomes
Authors
KeywordsP2P lending
Lender-borrower communication
Online trust
Issue Date2015
Citation
The 6th International Conference on Information Systems (ICIS 2015), Fort Worth, TX., 13-16 December 2015. How to Cite?
AbstractLenders face great uncertainty because of the information asymmetry problem in peerto-peer (P2P) marketplaces. This paper studies an online feature on a P2P platform, which allows lenders to seek information directly from the borrower of a loan, and examines the impact of the direct lender-borrower communication on the funding outcomes and the loan performance. Our analysis results show that the number of lender comments is negatively associated with funding success. This implies that as a listing receives more comments from lenders, the chance of getting funded is lower. On the other hand, the number of borrower responses and response length are positively associated with funding success, although they cannot help reduce the final interest rate. The role of borrower response is even stronger for listings with poor credit grades. The loan performance (i.e., default ratio), however, cannot be predicted based on the amount of lender-borrower communication.
DescriptionConference Theme: Exploring the Information Frontier
Persistent Identifierhttp://hdl.handle.net/10722/232802

 

DC FieldValueLanguage
dc.contributor.authorXu, JJ-
dc.contributor.authorLu, Y-
dc.contributor.authorChau, MCL-
dc.date.accessioned2016-09-20T05:32:32Z-
dc.date.available2016-09-20T05:32:32Z-
dc.date.issued2015-
dc.identifier.citationThe 6th International Conference on Information Systems (ICIS 2015), Fort Worth, TX., 13-16 December 2015.-
dc.identifier.urihttp://hdl.handle.net/10722/232802-
dc.descriptionConference Theme: Exploring the Information Frontier-
dc.description.abstractLenders face great uncertainty because of the information asymmetry problem in peerto-peer (P2P) marketplaces. This paper studies an online feature on a P2P platform, which allows lenders to seek information directly from the borrower of a loan, and examines the impact of the direct lender-borrower communication on the funding outcomes and the loan performance. Our analysis results show that the number of lender comments is negatively associated with funding success. This implies that as a listing receives more comments from lenders, the chance of getting funded is lower. On the other hand, the number of borrower responses and response length are positively associated with funding success, although they cannot help reduce the final interest rate. The role of borrower response is even stronger for listings with poor credit grades. The loan performance (i.e., default ratio), however, cannot be predicted based on the amount of lender-borrower communication.-
dc.languageeng-
dc.relation.ispartofInternational Conference on Information Systems, ICIS 2015-
dc.rightsCreative Commons: Attribution 3.0 Hong Kong License-
dc.subjectP2P lending-
dc.subjectLender-borrower communication-
dc.subjectOnline trust-
dc.titleThe effects of lender-borrower communication on P2P lending outcomes-
dc.typeConference_Paper-
dc.identifier.emailChau, MCL: mchau@business.hku.hk-
dc.identifier.authorityChau, MCL=rp01051-
dc.description.naturepostprint-
dc.identifier.scopuseid_2-s2.0-84964622041-
dc.identifier.hkuros263316-
dc.customcontrol.immutablesml 161028-

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