Bridging the credit gap: The influence of regional bank structure on the expansion of peer-to-peer lending

Eid, Nourhan; Yang, Junhong; Duygun, Meryem

Abstract

This paper investigates the extent to which the regional credit market structures, characterized by the presence and lending capacity of traditional banks, shape the growth of online lending marketplaces using peer-to-peer (P2P) lending data. Using an instrumental variables (IV) approach, our study suggests that areas underserved by traditional banks witness more significant growth in P2P lending. This impact is more pronounced in regions with a lower presence of small bank outreach. Furthermore, we find that an increase in P2P lending is associated with a reduced risk of borrower default. Our findings also show that the expansion of online lending marketplaces positively impacts borrowers’ financial well-being by improving their credit scores.

Citation

Eid, N., Yang, J., & Duygun, M. (2024). Bridging the credit gap: The influence of regional bank structure on the expansion of peer-to-peer lending. British Accounting Review, 56(6, Part A), Article 101448. https://doi.org/10.1016/j.bar.2024.101448

• Journal Article Type: Article
• Acceptance Date: Jul 29, 2024
• Online Publication Date: Aug 2, 2024
• Publication Date: 2024-11
• Deposit Date: Sep 25, 2024
• Publicly Available Date: Sep 30, 2024
• Journal: British Accounting Review
• Print ISSN: 0890-8389
• Electronic ISSN: 1095-8347
• Publisher: Elsevier
• Peer Reviewed: Peer Reviewed
• Volume: 56
• Issue: 6, Part A
• Article Number: 101448
• DOI: https://doi.org/10.1016/j.bar.2024.101448
• Keywords: Peer-to-peer Lending; Access to finance; Regional Banking; Financial Inclusion; Financial Well-being
• Public URL: https://nottingham-repository.worktribe.com/output/39990274
• Publisher URL: https://www.sciencedirect.com/science/article/pii/S0890838924002129?via%3Dihub
• Additional Information: This article is maintained by: Elsevier; Article Title: Bridging the credit gap: The influence of regional bank structure on the expansion of peer-to-peer lending; Journal Title: The British Accounting Review; CrossRef DOI link to publisher maintained version: https://doi.org/10.1016/j.bar.2024.101448; Content Type: article; Copyright: © 2024 The Authors. Published by Elsevier Ltd.