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BuR - Business Research

BuR - Business Research
Official Open Access Journal of VHB - Verband der Hochschullehrer für Betriebswirtschaft e.V.
German Academic Association for Business Research

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Emergence of Financial Intermediaries in Electronic Markets: The Case of Online P2P Lending

Abstract

We analyze the role of intermediaries in electronic markets using detailed data of more than 14,000 originated loans on an electronic P2P (peer-to-peer) lending platform. In such an electronic credit market, lenders bid to supply a private loan. Screening of potential borrowers and the monitoring of loan repayment can be delegated to designated group leaders. We find that these market participants act as financial intermediaries and significantly improve borrowers' credit conditions by reducing information asymmetries, predominantly for borrowers with less attractive risk characteristics. Our findings may be surprising given the replacement of a bank by an electronic marketplace.

Keywords

URN: urn:nbn:de:0009-20-19400

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Any party may pass on this Work by electronic means and make it available for download under the terms and conditions of the authorcontract. The text of the license may be accessed and retrieved via Internet at no url given

Recommended citation

Berger SC, Gleisner F (2009). Emergence of Financial Intermediaries in Electronic Markets: The Case of Online P2P Lending. BuR - Business Research, Vol. 2, Iss. 1, pp. 39-65, URN: urn:nbn:de:0009-20-19400

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