Influence of nonspecific factors on the interest rate of online peer-to-peer microloans in China

•This work examines the relation of nonspecific factors to China's P2P interest rate.•The private lending interest rate has the highest and the most significant impact.•The day June 15, 2018 is the turning point of the China's P2P lending market.•After that day, the effect of the private l...

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Bibliographic Details
Published in:Finance research letters 2021-07, Vol.41, p.101839, Article 101839
Main Authors: GUO, Jianfeng, LIU, Xiaojie, CUI, Changnan, GU, Fu
Format: Article
Language:English
Subjects:
Attention
Interest rate
Microloan
Online peer-to-peer lending
Private lending
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Summary:•This work examines the relation of nonspecific factors to China's P2P interest rate.•The private lending interest rate has the highest and the most significant impact.•The day June 15, 2018 is the turning point of the China's P2P lending market.•After that day, the effect of the private lending interest rate turned insignificant. This work explores the influence of nonspecific factors, including internal parameters such as term, volume, and participants, and external ones such as risk-free interest rates, private lending interest rates, and online attention, on the average interest rate of peer-to-peer (P2P) microloans in China. Empirical findings reveal that with a positive coefficient, the private lending interest rate is the most significant influencing factor. China's P2P market was changed on June 15, 2018; the effect of the private lending interest rate turned insignificant, and the negative coefficient of the loan term, short-term risk-free interest rate, and online attention became positive.
ISSN:1544-6123
1544-6131
DOI:10.1016/j.frl.2020.101839