Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/270845 
Year of Publication: 
2023
Series/Report no.: 
CFS Working Paper Series No. 706
Publisher: 
Goethe University Frankfurt, Center for Financial Studies (CFS), Frankfurt a. M.
Abstract: 
We analyze the performance of marketplace lending using loan cash flow data from the largest platform, Lending Club. We find substantial risk-adjusted performance of about 40 basis points per month for the entire loan portfolio. Other loan portfolios grouped by risk category have similar risk-adjusted performance. We show that characteristics of the local bank sector for each loan, such as concentration of deposits and the presence of national banks, are related to the performance of loans. Thus, marketplace lending has the potential to finance a growing share of the consumer credit market in the absence of a competitive response from the traditional incumbents.
Subjects: 
Marketplace lending
household finance
financial intermediation
financial innovation
competition
JEL: 
G12
G21
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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