A predictive indicator using lender composition for loan evaluation in P2P lending

Financial Innovation

Wenjun Zhou¹  Hui Xiong²  Chunyu Luo³  Shuai Jiang³  Yanhong Guo³ 

[1] Department of Business Analytics and Statistics, University of Tennessee, Knoxville, USA;Management Science and Information Systems Department, Rutgers University, New Brunswick, USA;School of Economics and Management, Dalian University of Technology, Linggong Road, Dalian, China;

关键词: P2P lending;    Maturity assessment;    Lender composition;    Loan evaluation;   

DOI  :  10.1186/s40854-021-00261-1

来源: Springer

【 摘 要 】

Most loan evaluation methods in peer-to-peer (P2P) lending mainly exploit the borrowers’ credit information. However, the present study presents the maturity-based lender composition score, which exploits the investment capability of a group of lenders who fund the same loan, to enhance the P2P loan evaluation. More specifically, we extract lenders’ profiles in terms of performance, risk, and experience by quantifying their investment history and develop our loan evaluation indicator by aggregating the profiles of lenders in the composition. To measure the ability of a lender for continuous improvement in P2P investment, we introduce lender maturity to capture this evolvement and incorporate it into the aggregation process. Our empirical study demonstrates that the maturity-based lender composition score can serve as an effective indicator for identifying loan quality and be included in other commonly used loan evaluation models for accuracy improvement.

【 授权许可】

CC BY