Online peer-to-peer lending decision making: Model development and testing

• Qingyao Wan

  Shanghai Finance University

• Dongyu Chen

  Soochow University and Fuzhou University

• Weihua Shi

  University of Southern Mississippi

We explored lenders’ decision-making processes in online peer-to-peer (P2P) lending by drawing on trust theory and the valence framework to develop an integrated decision- making model, which we then tested empirically using data from a survey conducted with 474 online lenders in China. The results showed that initial trust and perceived benefit determined willingness to lend, and that the fear of borrower opportunism did not have a significant impact on this willingness. Initial trust increased willingness to lend both directly and indirectly, increased it by increasing perceived benefit. We have identified the specific features of online P2P lending and provided valuable insights for borrowers, lenders, and intermediaries.

1. Qingyao Wan, Shanghai Finance University

   School of Insurance

2. Dongyu Chen, Soochow University and Fuzhou University
   School of Management
3. Weihua Shi, University of Southern Mississippi
   College of Business

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