What does not kill us makes us stronger: the story of repetitive consumer loan applications

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What does not kill us makes us stronger : the story of repetitive consumer loan applications. / Caglayan, Mustafa; Talavera, Oleksandr; Xiong, Lin; Zhang, Jing.

In: European Journal of Finance, 2020, p. 1-20.

Research output: Contribution to journalArticlepeer-review

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@article{69413cdf51ca42338efce8a843f4872b,
title = "What does not kill us makes us stronger: the story of repetitive consumer loan applications",
abstract = "We investigate borrower and lender behaviours when the borrower has experienced a sequence of failed loan applications. Our analysis is based on half a million observations from an established peer-to-peer (P2P) loan platform in China from 2010 to 2018. We find that borrowers who have better credit scores and who accept to pay higher interest rates are likely to reapply for funds after experiencing an earlier failed attempt. However, women and applicants with more education are discouraged from re-applying compared to their male or less-educated counterparts, respectively. On the funding supply side, lenders strive to fund safe borrowers who have high credit ratings and high income, though not those who offer a high interest rate.",
keywords = "China, discouraged borrower, Fintech, loan listing outcomes, Peer-to-peer (P2P) lending",
author = "Mustafa Caglayan and Oleksandr Talavera and Lin Xiong and Jing Zhang",
year = "2020",
doi = "10.1080/1351847X.2020.1793792",
language = "English",
pages = "1--20",
journal = "European Journal of Finance",
issn = "1351-847X",
publisher = "Taylor & Francis",

}

RIS

TY - JOUR

T1 - What does not kill us makes us stronger

T2 - the story of repetitive consumer loan applications

AU - Caglayan, Mustafa

AU - Talavera, Oleksandr

AU - Xiong, Lin

AU - Zhang, Jing

PY - 2020

Y1 - 2020

N2 - We investigate borrower and lender behaviours when the borrower has experienced a sequence of failed loan applications. Our analysis is based on half a million observations from an established peer-to-peer (P2P) loan platform in China from 2010 to 2018. We find that borrowers who have better credit scores and who accept to pay higher interest rates are likely to reapply for funds after experiencing an earlier failed attempt. However, women and applicants with more education are discouraged from re-applying compared to their male or less-educated counterparts, respectively. On the funding supply side, lenders strive to fund safe borrowers who have high credit ratings and high income, though not those who offer a high interest rate.

AB - We investigate borrower and lender behaviours when the borrower has experienced a sequence of failed loan applications. Our analysis is based on half a million observations from an established peer-to-peer (P2P) loan platform in China from 2010 to 2018. We find that borrowers who have better credit scores and who accept to pay higher interest rates are likely to reapply for funds after experiencing an earlier failed attempt. However, women and applicants with more education are discouraged from re-applying compared to their male or less-educated counterparts, respectively. On the funding supply side, lenders strive to fund safe borrowers who have high credit ratings and high income, though not those who offer a high interest rate.

KW - China

KW - discouraged borrower

KW - Fintech

KW - loan listing outcomes

KW - Peer-to-peer (P2P) lending

UR - http://www.scopus.com/inward/record.url?scp=85088167233&partnerID=8YFLogxK

U2 - 10.1080/1351847X.2020.1793792

DO - 10.1080/1351847X.2020.1793792

M3 - Article

AN - SCOPUS:85088167233

SP - 1

EP - 20

JO - European Journal of Finance

JF - European Journal of Finance

SN - 1351-847X

ER -