Online peer-to-peer lending: A review of the literature

Abstract

This study reviews the literature of online peer-to-peer (P2P) lending from 2008 until 2020 as an emergent but fast spreading phenomenon in the context of digital finance. Previous literature is geographically skewed towards United States and China with focus on determinants of funding success and loan attributes. Recent studies shift from using logit and survival analysis methods to examine funding success and default predictions, towards applying artificial intelligence. There is a controversial debate regarding adopting a self-regulatory approach versus stricter financial institutions-based regulations with a few studies suggesting a hybrid approach. We suggest several avenues for future research, such as examining the determinants and performance of P2P lending platforms in emerging and developing markets; regulatory differences, the effects of behavioral characteristics such as cultural impact, language, information technology literacy, and the innovation quotient on P2P funding attributes; and the relationship between P2P lending and traditional finance channels. 2021 The Author(s)