Online Peer-to-Peer Lending – A Literature Review

Abstract

Burkhardt Funk is a full professor in the field of information systems. His research interests cover a wide range of topics, e.g. decision making in the context of E-Commerce scenarios and the integration of ERP systems and Environmental Management Information Systems. As a member of the presidential board of the university he is responsible for the overall IT strategy of the Leuphana University. He has founded several companies and consulted major European Enterprises. JIBC August 2011, Vol. 16, No.2- 2-The term online peer-to-peer lending (P2P) describes the loan origination process between private individuals on online platforms were financial institutions operate only as intermediates required by law. Initialized by groups in online social networks, first commercial online P2P lending platforms started in 2005. Thus online P2P lending is a relatively young research field. This paper gives a brief overview of the P2P lending market and reviews the research on the determinants of P2P lending. We distinguish between financial and demographic characteristics of the borrower, as well as social characteristics like friends and group affiliation. The reviewed literature gives insights on