2021/08/23 by Timothy Dore, Traci Mach
Business, Management and Accounting · Economics, Econometrics and Finance · #FinTech, Crowdfunding, Digital Finance #Microfinance and Financial Inclusion #Financial Literacy, Pension, Retirement Analysis
paper · doi:10.1080/00036846.2021.1962514
In 2005, Prosper launched the first peer-to-peer lending website in the US, allowing for consumers to apply for and receive loans entirely online. To understand the effect of this new credit source, we match application-level data from Prosper to credit bureau data. Post application, borrowers’ credit scores increase and their credit card utilization rates fall relative to non-borrowers in the short run. In the longer run, total debt levels for borrowers are higher than those of non-borrowers. Despite increased debt levels relative to non-borrowers, delinquency rates for borrowers are significantly lower.