Menu Expand

The Impact of COVID-19 on Demand and Lending Behavior in Prosocial P2P Lending

  1. Journals
  2. Economics, Finance, Business & Management
  3. Credit and Capital Markets – Kredit und Kapital
  4. Vol. 56, Issue 1
  5. pp. 5–26

JOURNAL ARTICLE

Cite JOURNAL ARTICLE

Style
Priberny, C. The Impact of COVID-19 on Demand and Lending Behavior in Prosocial P2P Lending. Credit and Capital Markets – Kredit und Kapital, 56(1), 5-26. https://doi.org/10.3790/ccm.56.1.5
Priberny, Christopher "The Impact of COVID-19 on Demand and Lending Behavior in Prosocial P2P Lending" Credit and Capital Markets – Kredit und Kapital 56.1, 2023, 5-26. https://doi.org/10.3790/ccm.56.1.5
Priberny, Christopher (2023): The Impact of COVID-19 on Demand and Lending Behavior in Prosocial P2P Lending, in: Credit and Capital Markets – Kredit und Kapital, vol. 56, iss. 1, 5-26, [online] https://doi.org/10.3790/ccm.56.1.5
Format
Download

The Impact of COVID-19 on Demand and Lending Behavior in Prosocial P2P Lending

Priberny, Christopher

Credit and Capital Markets – Kredit und Kapital, Vol. 56 (2023), Iss. 1 : pp. 5–26

1 Citations (CrossRef)

Read Now Download (PDF)

Additional Information

Article Details

Publisher Name
Duncker & Humblot
DOI
https://doi.org/10.3790/ccm.56.1.5
Language
English
Pages
22
Keywords

Author Details

Christopher Priberny, corresponding author. Deutsche Bundesbank University of Applied Sciences, 57627 Hachenburg, Germany and Department of Finance, University of Regensburg, Germany.

Cited By

  1. Ecosystem Dynamics and Strategies for Startups Scalability

    Startups Financing Lessons Learned From Saiz-Alvarez Microdonations

    Saiz-Alvarez, Jose Manuel

    2023

    https://doi.org/10.4018/979-8-3693-0527-0.ch004 [Citations: 0]

References

  1. Allison, T. H./Davis, B. C./Short, J. C./Webb, J. W. (2015): Crowdfunding in a prosocial microlending environment: Examining the role of intrinsic versus extrinsic cues. Entrepreneurship Theory and Practice, Vol. 39(1), 53–73.  Google Scholar
  2. Allison, T. H./McKenny, A .F./Short, J. C. (2013): The effect of entrepreneurial rhetoric on microlending investment: An examination of the warm-glow effect, Journal of Business Venturing, Vol. 28, 690–707.  Google Scholar
  3. Berger, S./Skiera, B. (2012): Elektronische Kreditmarktplätze: Funktionsweise, Gestaltung und Erkenntnisstand bei dieser Form des “Peer-to-Peer Lending”. Credit and Capital Markets, Vol. 45(3), 289–311.  Google Scholar
  4. Berns, J. P./Figueroa-Armijos, M./da Motta Veiga, S. P./Dunne, T. C. (2020): Dynamics of lending-based prosocial crowdfunding: Using a social responsibility lens, Business Ethics, Vol. 161(1), 169–185.  Google Scholar
  5. Bruton, G./Khavul, S./Siegel, D. (2015): New financial alternatives in seeding entrepreneurship: Microfinance, crowd-funding, and peer-to-peer innovation, Entrepreneurship Theory and Practice, Vol. 39(19), 9–26.  Google Scholar
  6. Burtch, G./Ghose, A./Wattal, S. (2014): Cultural differences and geography as determinants of online pro-social lending, MIS Quarterly, Vol. 38(3), 773–794.  Google Scholar
  7. Colak, G./Öztekin, O. (2021): The impact of COVID-19 pandemic on bank lending around the world, Journal of Banking & Finance, Vol. 133.  Google Scholar
  8. Dorfleitner, G./Forcella, D./Nguyen, Q. (2020a): Microfinance and Green Energy Lending: First Worldwide Evidence, Credit and Capital Markets, Vol. 53(4), 427–460.  Google Scholar
  9. Dorfleitner, G./Oswald, E./Röhe, M. (2020b): The access of microfinance institutions to financing via the worldwide crowd, Quarterly Review of Economics and Finance, Vol. 75, 133–146.  Google Scholar
  10. Dorfleitner, G./Oswald, E./Zhang, R. (2021): From credit risk to social impact: On the funding determinants in interest-free peer-to-peer lending, Journal of Business Ethics, Vol. 170(2), 375–400.  Google Scholar
  11. Dorfleitner, G./Priberny, C./Schuster, S./Stoiber, J./Weber, M./de Castro, I./Kammler, J. (2016): Description-text related soft information in peer-to-peer lending – evidence from two leading European platforms, Journal of Banking & Finance, Vol. 64, 169–187.  Google Scholar
  12. Dorfleitner, G./Röhe, M./Renier, N. (2017): The access of microfinance institutions to debt capital: An empirical investigation of microfinance investment vehicles, Quarterly Review of Economics and Finance, Vol. 65(C), 1–15.  Google Scholar
  13. Gafni, H./Hudon, M./Périlleux, A. (2021): Business or basic needs? the impact of loan purpose on social crowdfunding platforms, Journal of Business Ethics, Vol. 173(4), 777–793.  Google Scholar
  14. Galak, J./Small, D./Stephen, A. T. (2011): Microfinance decision making: A field study of prosocial lending, Journal of Marketing Research, Vol. 48, 130–137.  Google Scholar
  15. Gama, A. P. M./Emanuel-Correia, R./Augusto, M./Duarte, F. (2021): Bringing modernity to prosocial crowdfunding’s campaigns: an empirical examination of the transition to modern sectors, Applied Economics,Vol. 53(49), 5677–5694.  Google Scholar
  16. Glosten, L. R./Jagannathan, R./Runkle, D. E. (1993): On the relation between the expected value and the volatility of the nominal excess return on stocks, The Journal of Finance 48(5), 1779–1801.  Google Scholar
  17. Goodell, J. W. (2020): COVID-19 and finance: Agendas for future research, Finance Research Letters, Vol. 35.  Google Scholar
  18. Hasan, I./Politsidis, P. N./Sharma, Z. (2021): Global syndicated lending during the COVID-19 pandemic, Journal of Banking & Finance, Vol. 133.  Google Scholar
  19. Hudson, R./Urquhart, A./Zhang, H. (2020): Political uncertainty and sentiment: Evidence from the impact of Brexit on financial markets, European Economic Review, Vol. 129, 1–4.  Google Scholar
  20. International Monetary Fund, World Bank, (2020): COVID-19 : The regulatory and supervisory implications for the banking sector, Policy Note.  Google Scholar
  21. Kennedy, P. (2008): A guide to econometrics. 6. ed., Blackwell, Malden, MA.  Google Scholar
  22. Kreuzer, C./Priberny, C./Huther, J. (2022): The perception of Brexit uncertainty and how it affects markets. SSRN Working Paper.  Google Scholar
  23. Ly, P./Mason, G. (2012): Individual preferences over development projects: Evidence from microlending on Kiva, Voluntas: International Journal of Voluntary and Nonprofit Organizations, Vol. 23(4), 1036–1055.  Google Scholar
  24. Moss, T. W./Neubaum, D. O./Meyskens, M. (2015): The effect of virtuous and entrepreneurial orientations on microfinance lending and repayment: A signaling theory perspective, Entrepreneurship Theory and Practice, Vol. 39(1), 27–52.  Google Scholar
  25. Najaf, K./Subramaniam, R. K./Atayah, O. F. (2022): Understanding the implications of fintech peer-to-peer (p2p) lending during the COVID-19 pandemic, Journal of Sustainable Finance & Investment, Vol. 12(1), 87–102.  Google Scholar
  26. Sun, Q./Tong, W. H. (2010): Risk and the January effect, Journal of Banking & Finance, Vol. 34(5), 965–974.  Google Scholar
  27. Szczygielski, J. J./Charteris, A./Bwanya, P. R./Brzeszczyński, J. (2022): Which covid-19 information really impacts stock markets?, Journal of International Financial Markets, Institutions and Money, Vol. 84, 101592.  Google Scholar
  28. Wellalage, N. H./Kumar, V./Hunjra, A. I./Al-Faryan, M. A. S. (2022): Environmental performance and firm financing during COVID-19 outbreaks: Evidence from SMEs. Finance Research Letters, Vol. 47, 102568.  Google Scholar
  29. Zheng, C./Zhang, J. (2021): The impact of COVID-19 on the efficiency of microfinance institutions, International Review of Economics & Finance, Vol. 71, 407–423.  Google Scholar

Abstract

I derive two innovative metrics, capturing the demand and the excess demand for prosocial P2P loans in the US. The measures are based on a data set comprising prosocial P2P loan applications obtained from the US P2P lending platform Kiva for the period of November 2011 to December 2022. Furthermore, I analyze how both indices are influenced by the COVID-19 pandemic. Interestingly, the measures for the current pandemic development show a negative impact on demand while the COVID-19 reproduction rate shows a positive relation, indicating a pro-active behavior of borrowers. On the other side, socially motivated lenders seem to be less generous in providing interest-free loans in times of a worsening pandemic. As it turns out, the risk-free interest level positively impacts demand and excess demand for prosocial lending on Kiva even though the loans were granted without any interest.

Table of Contents

Section Title Page Action Price
Christopher Priberny: The Impact of COVID-19 on Demand and Lending Behavior in Prosocial P2P Lending 5
Abstract 5
I. Introduction 5
II. Prosocial P2P Lending and Relevant Literature 7
1. Kiva’s Field Partner Loans 8
2. Kiva US’s Direct Loans 8
3. Literature Overview 9
III. Measuring Demand and Excess Demand on Kiva 10
IV. Data and Methodology 14
1. Data 14
2. Exogenous Variables 16
3. Methodology 17
V. Results 19
1. Descriptive Analysis 19
2. Regression Analysis 21
VI. Conclusion 23
References 25

Contact

Duncker & Humblot GmbH Carl-Heinrich-Becker-Weg 9 12165 Berlin, Deutschland T: +49 30 790006-0

Quick Navigation

2024 Duncker & Humblot GmbH

Powered by CloudPublish

We use cookies to ensure that you get the best experience on our website. Learn more about how we use cookies.