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

The Impact of COVID-19 on Demand and Lending Behavior in Prosocial P2P Lending
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Year:    2023

Author:    Priberny, Christopher

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

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.

Journal Article Details

Publisher Name:    Global Science Press

Language:    English

DOI:    https://doi.org/10.3790/ccm.56.1.5

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

Published online:    2023-01

AMS Subject Headings:    Duncker & Humblot

Copyright:    COPYRIGHT: © Global Science Press

Pages:    22

Keywords:    KIVA prosocial P2P lending demand lending behavior COVID-19 G20 G21 G41

Author Details

Priberny, Christopher

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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