Bridging the credit gap: the influence of regional bank structure on the expansion of peer-to-peer lending

Abstract

This paper investigates the extent to which the regional credit market structures, characterized by the presence and lending capacity of traditional banks, shape the growth of online lending marketplaces using peer-to-peer (P2P) lending data. Using an instrumental variables (IV) approach, our study suggests that areas underserved by traditional banks witness more significant growth in P2P lending. This impact is more pronounced in regions with a lower presence of small bank outreach. Furthermore, we find that an increase in P2P lending is associated with a reduced risk of borrower default. Our findings also show that the expansion of online lending marketplaces positively impacts borrowers’ financial well-being by improving their credit scores.

Metadata

Item Type:	Article
Authors/Creators:	Eid, N. https://orcid.org/0000-0002-2869-4660 Yang, J. https://orcid.org/0000-0002-4509-1263 Duygun, M.
Copyright, Publisher and Additional Information:	© 2024 The Authors. Except as otherwise noted, this author-accepted version of a journal article published in The British Accounting Review is made available via the University of Sheffield Research Publications and Copyright Policy under the terms of the Creative Commons Attribution 4.0 International License (CC-BY 4.0), which permits unrestricted use, distribution and reproduction in any medium, provided the original work is properly cited. To view a copy of this licence, visit http://creativecommons.org/licenses/by/4.0/ © 2024 The Authors. Published by Elsevier Ltd. This is an open access article under the CC BY-NC license ( http://creativecommons.org/licenses/by-nc/4.0/ ).
Keywords:	Peer-to-peer lending; Access to finance; Regional banking; Financial inclusion; Financial well-being
Dates:	Published: November 2024 Published (online): 2 August 2024 Accepted: 29 July 2024 Submitted: 12 May 2023
Institution:	The University of Sheffield
Academic Units:	The University of Sheffield > Faculty of Social Sciences (Sheffield) > Management School (Sheffield)
Depositing User:	Symplectic Sheffield
Date Deposited:	04 Sep 2024 14:48
Last Modified:	02 Oct 2024 09:51
Status:	Published
Publisher:	Elsevier
Refereed:	Yes
Identification Number:	10.1016/j.bar.2024.101448
Open Archives Initiative ID (OAI ID):	oai:eprints.whiterose.ac.uk:216704

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Bridging the credit gap: the influence of regional bank structure on the expansion of peer-to-peer lending

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