Empirical Test Of The Effect Of Information Certification By P2P Platform On Lending Efficiency

As an information intermediary helping strange individuals to realize direct borrowing or lending,the P2 P platform provides services of information collection,information dissemination,information exchange,transaction matching,and credit evaluation on borrowers.In P2 P lending,the information asymmetry between lenders and borrowers is an important determinant for the efficiency of P2 P lending.To our knowledge,there are few studies on whether P2 P platform has an intermediary role or plays its intermediary role.Especially,there lacks a unified system to assess individuals’ credit worthiness in China,hence the check and certification on heterogeneous information voluntarily disclosed by borrowers are important functions of P2 P platform,which will affect P2 P lending efficiency.Based on the introduction of research background,relevant theories and literature review,this dissertation uses the listing data from Renrendai from February 2011 to December 2013 as a sample to examine the effects of the certifications on original information disclosed by borrowers on the success rate of listings and the default probability of loans.Using the adjustment of certification mechanism on January 4,2012 as a quasi-natural experiment,the impacts of the event on the success rate of listings and the default probability of loans are furtherly examined.The empirical results show that,in summary,the more certification information owned by a borrower,the higher the success rate of its borrowing is and the less the default possibility is.Specifically,the information certifications on the statuses of vehicle,real estate,marriage,education,video and microblog have positive effect on the success rate of a listing,and the certifications on the statuses of vehicle,education,video and microblog are also helpful to decrease the default possibility of a loan.The positive relationship between the number of certifications and the success rate of a listing is more pronounced for high-risk borrowers than for low-risk borrowers.Using a quasi-natural experiment event that the platform adjust its mechanism of information certification,further evidence show twofold results.On the one hand,the adjustment of mechanism attracts higher quality borrowers to the platform,which finally leads to an increase of the overall success rate of listings.On the other hand,the newly added certification on information about video after the event has a significantly positive effect on the success rate of listings,and the newly added certification would weaken the positive roles of the old certification availble before the event in increasing the success rate of listings,which indicates that there exists a substitution relation between the new and the old certifications.In addition,we find no significant effect of the adjustment of the certification mechanism on the default probability of P2 P loans.