Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/215102 
Year of Publication: 
2020
Series/Report no.: 
CESifo Working Paper No. 8100
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
Peer-to-business lending refers to online platforms facilitating loans from individuals to smalland medium-sized enterprises (SMEs). We conjecture that easy-to-understand risk ratings conveyed by the platform play a pronounced role in influencing the borrowing success of SMEs and that more sophisticated financial information and adverse selection are largely absent in these markets. We introduce a dataset of 414 SME marketplace loans and 8,236 online loan days to test these propositions. The data examined provide strong support for the importance of simple platform ratings in influencing investor behavior, while the effect of more detailed financial information is less pronounced.
Subjects: 
debt crowdfunding
entrepreneurial finance
digital platforms
JEL: 
G21
G24
G32
Document Type: 
Working Paper
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