Financial socialization, strength of social ties and investment literacy of investors in peer-to-peer (P2P) lending platforms (original) (raw)
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This study explores survey data of investors in peer-to-peer (P2P) lending platforms to assess their investment literacy, to explore how this literacy is affected by their financial socialization and the strength of their social ties, and to question whether this effect differs among investors’ sociodemographic groups. Our research revealed that the investment literacy of P2P lending platform investors is high and rejects a common perception that investors in P2P lending platforms have a low level of investment literacy. Significant sociodemographic determinants of investment literacy are investor gender, age, net income, and interface with the finance sector. As for financial socialization, peers showed to be the main socialization agent and demonstrated the strongest social ties with our respondents. The compound direct effect of financial socialization on the aggregated level of investment literacy of P2P lending platforms’ investors was positive and stronger than that on its sep...
Peer-to-peer lending to businesses: Investors’ characteristics, investment criteria and motivation
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Online peer-to-peer (P2P) business lending, where individual investors provide unsecured loans directly to individual business borrowers without the intermediation of banks, has experienced rapid growth in recent years. However, very little is currently known about the individuals who lend money through the online P2P lending platforms. Drawing on the cognitive evaluation theory and responses to a survey from 630 investors of the Funding Circle platform, the largest P2P business-lending platform in the United Kingdom, this article describes their personal characteristics, investment criteria and their motivation to invest. A typical P2P business lender is male, highly educated and relatively wealthy with a science, business or finance degree. According to the factor analysis, variables related to company quality and associated risks are important investment criteria, while the expectation of making a financial return is the main motivation behind individuals’ decision to lend money ...
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How does social capital affect trust? Evidence from a Chinese peer-to-peer lending platform shows that regional social capital affects the trustee’s trustworthiness and the trustor’s trust propensity. Ceteris paribus, borrowers from regions with higher social capital receive larger bids from individual lenders and have higher funding success, larger loan sizes, and lower default rates, especially for low-quality borrowers. Lenders from regions with higher social capital take higher risks and have higher default rates, especially for inexperienced lenders. Cross-regional transactions are most (least) likely to be realized between parties from regions with high (low) social capital.
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Oman is a relative newcomer to Fintech firms and products. Despite the fact that Oman's residents are increasingly using internet banking to perform their ordinary banking activities, they have little knowledge of online fintech products. As a result, the purpose of this study is to determine the level of investor awareness and perception of P2P lending in Oman. The major goal is to investigate the level of awareness of P2P based on the sociodemographic characteristics of the respondents and their perception about P2P lending platform. The study is carried out in the Governorate of Muscat using primary data gathered using a semi-structured questionnaire that was distributed online from 108 individuals, using convenient sampling method. Data was examined using descriptive statistics such as percentages, mean score, and standard deviation. According to the study's findings, respondents' awareness of P2P lending platforms is extremely poor. They know relatively little about Fintech businesses that provide various types of investing opportunities. They believe that using online lending platforms is risky and inconvenient. They have no plans to invest in a peer-to-peer lending network and will not encourage their friends and family to do so.
Abstract Peer to Peer lending and Web 2.0 have two things in common. The first common denominator is that both of them are rather newcomers in their respective fields. The second is that they are both based on mutual and social exchanges between people instead of centrally controlled communications and relationships. The main objective of this paper was to investigate whether they are integrated to support social interactions and associations. We find that peer to peer lending consists of diverse websites of microfinance (Kiva), social investing (MicroPlace) as well as small loans at market rates (Prosper, Zopa, Lending Club), and even lending between friends and family members (Virgin Money). The paper studies the use of web 2.0 technologies (blogs, interactivity between lenders and buyers, peers' reviews and comments, peers communities and chats) in six such peer-to-peer lending sites. It finds that most of the peer-to-peer lenders are in fact intermediaries between the peers (lender and borrowers) and there is little direct contact between the peers. One website used none of the web 2.0 tools. None of the websites used all the web 2.0 tools. Key words Peer to peer, p2p, social lending, microcredit, technology, web 2.0, trust,
Peer to Peer Lending Platform can Influence investors to help Capital for Small Business Enterprise
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Peer to peer lending as a platform that can bring together investors and recipients of funds (SMEs). Because all this time, prospective investors do not have confidence in how SME owners can use the capital provided correctly. Likewise, with SMEs, it is often difficult to get capital as part of business development. With peer to peer lending, there are companies that mediate between the two parties. In addition to economic aspects, the company has a social aspect, which helps improve the welfare of SMEs by providing various services such as training. In this context, data was collected from potential investors, investors, peer to peer lending companies and SMEs that received the funding. This study uses a qualitative method. Where the author wants to find out how far this peer to peer lending platform can help investors, so they want to participate in developing SMEs and the benefits received by SMEs from peer to peer lending.
Analysis of Willingness to Lend in Peer-To-Peer Lending Applications
Russian Journal of Agricultural and Socio-Economic Sciences, 2020
Peer-to-Peer Lending (P2P) applications were developed as an alternative funding solution, mainly for small-medium enterprises. P2P can also be a promising alternative investment instrument. The significant gap between the number of lenders and borrowers is as a major issue that has been identified in the P2P of Indonesia. Therefore, the analysis of factors affecting willingness to lend in P2P lending needs to be done. The purpose of this study is to identify the socioeconomic characteristics of lenders, lenders perspective on familiarity, service quality, security protection, borrowers' reputation, borrowers' information, perceived benefits, perceived risk, trust to the borrower, trust to the intermediary, and willingness to lend in P2P lending applications. A total of 109 respondents filled out online questionnaires distributed through several media with the criteria of Indonesian citizens with investment experience in P2P. Descriptive and crosstab analysis was applied in this study. Based on the result, the impression that the borrowers will keep their promises (TB3), the system/ policy applied in the P2P platform to protect the interest of lenders (TI 2), the sense of security upon making transactions in P2P (SP 1), more attractive investment returns (PB 3) and quality assurance of prospective borrowers (SQ 4) are the most important factors affecting lenders willingness to lend.