Peer to peer lending: An insight into investors’ mindset

Abstract

Peer to peer lending (aka P2P lending), which can also be called “social lending” or “crowd lending” is a financing alternative which allows bypassing middlemen in the lending space using FinTech. P2P does the work of scientifically matching the requirements of lender with the profile of the borrower to facilitate easy approval of loans at negotiable interest rates. An estimated billion-dollar industry today in India, along with providing a transaction platform to lenders and borrowers, the P2P website sets the rates and terms of each trade. This paper looks to establish parameters for such price discovery from both perspectives and deep dive into its intensity in the finalisation process. Crowdfunding is a method used by P2P lending platforms which makes it easier for borrowers to discover lenders who are willing to provide funding to unsecured loans