TY  - UNPD
A1  - Kräussl, Roman
A1  - Kräussl, Zsofia
A1  - Pollet, Joshua M.
A1  - Rinne, Kalle
T1  - The performance of marketplace lenders : evidence from lending club payment data
T2  - Center for Financial Studies (Frankfurt am Main): CFS working paper series ; No. 598
N2  - 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.
T3  - CFS working paper series - 598 
KW  - marketplace lending
KW  - peer-to-peer
KW  - portfolio performance
KW  - household finance
KW  - financial innovation
KW  - finance and technology
Y1  - 2018
UR  - http://publikationen.ub.uni-frankfurt.de/frontdoor/index/index/docId/46992
UR  - https://nbn-resolving.org/urn:nbn:de:hebis:30:3-469928
UR  - https://www.ifk-cfs.de/fileadmin/downloads/publications/wp/2018/CFS_WP_598.pdf
IS  - August 2018
PB  - Center for Financial Studies
CY  - Frankfurt, M.
ER  -