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

2020 ◽  
pp. 101839
Author(s):  
Jianfeng GUO ◽  
Xiaojie LIU ◽  
Changnan CUI ◽  
Fu GU
Keyword(s):  
Interest Rate ◽  
Peer To Peer ◽  
Nonspecific Factors ◽  
The Interest Rate

An Evolutionary Behavior Forecasting Model for Online Lenders and Borrowers in Peer-to-Peer Lending

2017 ◽  
Vol 34 (01) ◽  
pp. 1740008 ◽  
Author(s):  
Wei Liu ◽  
Li-Qiu Xia
Keyword(s):  
Interest Rate ◽  
Evolutionary Game ◽  
Mutual Effect ◽  
Peer To Peer ◽  
Forecasting Model ◽  
Private Lending ◽  
P2p Lending ◽  
Numeric Experiment ◽  
The Interest Rate ◽  
Borrowing Cost

Online peer-to-peer (P2P) lending is an emerging financial mode that combines the Internet with private lending to provide unsecured lending among individuals. The interest rate and risk depend on online lenders and borrowers’ behavior choices and game in the context of P2P lending. In this paper, we propose an evolutionary behavior forecasting model for online participants based on the risk preference behavior of lenders and the credit choice of borrowers. We highlight four evolutionary equilibrium states of online lenders and borrowers’ behavior and their effects on the risk of online P2P lending platforms. We run a numeric experiment using the Paipaidai platform in China as a case and find that the evolutionary behavior of online lenders and borrowers is determined by the mutual effect of the interest rate, information gathering cost, borrowing cost, and yield rate. This paper uses evolutionary game methodology to analyze online P2P lending behavior in China and explores P2P fund success from the dual perspective of lenders and borrowers.

scholarly journals Evaluating Default Risk and Loan Performance in UK Peer-to-Peer Lending: Evidence from Funding Circle

2021 ◽  
Vol 25 (5) ◽  
pp. 530-538
Author(s):  
Boyu Xu ◽  
◽  
Zhifang Su ◽  
Jan Celler
Keyword(s):  
Interest Rate ◽  
Default Risk ◽  
Binary Logistic Regression ◽  
The United States ◽  
Peer To Peer ◽  
Loan Default ◽  
P2p Lending ◽  
Loan Defaults ◽  
The Interest Rate ◽  
The Uk

The United Kingdom is the third-largest peer-to-peer (P2P) lending market in the world, which is surpassed only by the two dominant forces in P2P investing, China and the United States of America. As an innovative financial market in the UK, P2P lending brings not only many opportunities but also many risks, especially the loan default risk. In this context, this paper uses binary logistic regression and survival analysis to evaluate default risk and loan performance in UK P2P lending. The empirical results indicate that credit group, loan purpose for capital needs, sector type, loan amount, interest rate, loan term, and the age of the company all have a significant impact on the probability of loan default. Among them, the interest rate, loan term, and loan purpose for capital needs are the three most important determinants of the probability of loan defaults and survival time of loans.

scholarly journals Financial Innovation Management: Loan Price in the Crowdfunding and Peer-To-Peer Lending Platforms

2020 ◽  
pp. 256-274
Author(s):  
Greta Keliuotytė-Staniulėnienė ◽  
Monika Kukarėnaitė
Keyword(s):  
Factor Analysis ◽  
Interest Rate ◽  
Financial Innovation ◽  
Peer To Peer ◽  
External Factors ◽  
Annual Rate ◽  
The Real ◽  
Business Loan ◽  
Peer Lending ◽  
The Interest Rate

As an alternative to traditional bank financing, companies (especially small and medium-sized) can opt for loans from innovative financial facilities: peer-to-peer lending and crowdfunding platforms. When using these alternative financing opportunities, it is very important to identify the main factors of the business loan interest rate and properly assess the overall cost of borrowing. This paper summarizes the scientific discussion on the issue of innovative business funding sources and one of the most important ratios referred to reasonably compare the price of financing sources and the related expenses. Therefore, the main purpose of this research is to identify the internal and external factors of interest rate on business loans and determine the overall total annual rate of charge for business loans on innovative financing platforms. After the analysis of academic literature and statistical data of crowdfunding and peer-to-peer lending market, the authors used the methods of correlation-regression and factor analysis to identify the factors that determine the interest rate of business loans on crowdfunding and peer-to-peer platforms; and scenario analysis to evaluate the total annual rate of charge for business loans. According to the results of correlation-regression and factor analysis, the summarized factors of business loan interest rate are economic environment, competitive environment, and results of the platform performance. External factors appeared to have a much greater impact on the interest rate for business loans in crowdfunding and peer-to-peer lending platforms than internal. The assessment of the total annual rate of charge for business loans confirmed that the peer-to-peer and crowdfunding platforms offer a lower rate than traditional financing institutions, on the other hand, the total rate at the crowdfunding platforms is higher compared to peer-to-peer lending platforms, due to the higher administrative fees and interest rates. The outcomes of this research expanded the scope of research on the sector of financial innovation. The research revealed the peculiarities of crowdfunding and peer-to-peer lending, the factors that affect a loan interest rate, and the real price that business owners have to pay for borrowed funds. Obtained results could be relevant to both lending platforms and businesses seeking to identify and compare the real cost of traditional and alternative financing. Keywords: financial innovation, alternative financing, financial technologies, factors of interest rate, price of borrowing, the total annual rate of charge for business loans.

The Role of Different Channels in Transmitting Monetary Policy into Output and Price in Vietnam

2015 ◽  
pp. 20-40
Author(s):  
Vinh Nguyen Thi Thuy
Keyword(s):  
Monetary Policy ◽  
Exchange Rate ◽  
Interest Rate ◽  
Money Supply ◽  
Monetary Transmission ◽  
Impulse Response Functions ◽  
Short Run ◽  
The Exchange Rate ◽  
The Interest Rate ◽  
Interest Rate Channel

The paper investigates the mechanism of monetary transmission in Vietnam through different channels - namely the interest rate channel, the exchange rate channel, the asset channel and the credit channel for the period January 1995 - October 2009. This study applies VAR analysis to evaluate the monetary transmission mechanisms to output and price level. To compare the relative importance of different channels for transmitting monetary policy, the paper estimates the impulse response functions and variance decompositions of variables. The empirical results show that the changes in money supply have a significant impact on output rather than price in the short run. The impacts of money supply on price and output are stronger through the exchange rate and credit channels, but however, are weaker through the interest rate channel. The impacts of monetary policy on output and inflation may be erroneous through the equity price channel because of the lack of an established and well-functioning stock market.

DETERMINAN INFLASI DI INDONESIA PERIODE 1980-2015

2016 ◽  
Vol 21 (1) ◽  
pp. 1-7
Author(s):  
Risna Risna
Keyword(s):  
Interest Rate ◽  
Interest Rates ◽  
Money Supply ◽  
Government Spending ◽  
Positive Impact ◽  
Secondary Data ◽  
Quantitative Approach ◽  
State Spending ◽  
Factors Affecting ◽  
The Interest Rate

This study aims to determine the effect of government spending, the money supply, the interest rate of Bank Indonesia against inflation.This study uses secondary data. Secondary data were obtained directly from the Central Bureau of Statistics and Bank Indonesia. It can be said that there are factors affecting inflationas government spending, money supply, and interest rates BI. The reseach uses a quantitative approach to methods of e-views in the data. The results of analysis of three variables show that state spending significantand positive impact on inflationin Indonesia, the money supply significantand negative to inflationin Indonesia, BI rate a significantand positive impact on inflation in Indonesia

Insurance Companies and the Interest Rate

1953 ◽  
Vol 9 (4) ◽  
pp. 15-17
Author(s):  
Shelby Cullom Davis
Keyword(s):  
Interest Rate ◽  
Insurance Companies ◽  
The Interest Rate

Analyzing the financial and economic momentum as a result of changes in the interest rate

2020 ◽  
Vol 16 (9) ◽  
pp. 1656-1673
Author(s):  
V.V. Smirnov
Keyword(s):  
Interest Rate ◽  
Natural Gas ◽  
Central Bank ◽  
Crude Oil ◽  
Oil Prices ◽  
Global Capitalism ◽  
Positive Effects ◽  
Russian Economy ◽  
Oil And Natural Gas ◽  
The Interest Rate

Subject. The article discusses financial and economic momenta. Objectives. I determine financial and economic momenta as the interest rate changes in Russia. Methods. The study is based on a systems approach and the method of statistical analysis. Results. The Russian economy was found to strongly depend on prices for crude oil and natural gas, thus throwing Russia to the outskirts of the global capitalism, though keeping the status of an energy superpower, which ensures a sustainable growth in the global economy by increasing the external consumption and decreasing the domestic one. The devaluation of the national currency, a drop in tax revenue, etc. result from the decreased interest rate. They all require to increase M2 and the devalued retail loan in RUB, thus rising the GDP deflator. As for positive effects, the Central Bank operates sustainably, replenishes gold reserves and keeps the trade balance (positive balance), thus strengthening its resilience during a global drop in crude oil prices and the COVID-19 pandemic. The positive effects were discovered to result from a decreased in the interest rate, rather than keeping it low all the time. Conclusions and Relevance. As the interest rate may be, the financial and economic momentum in Russia depends on the volatility of the price for crude oil and natural gas. Lowering the interest rate and devaluing the national currency, the Central Bank preserves the resource structure of the Russian economy, strengthens its positions within the global capitalism and keeps its status of an energy superpower, thus reinforcing its resilience against a global drop in oil prices.

scholarly journals Risk Management for Bonds with Embedded Options

Mathematics ◽  
2020 ◽  
Vol 8 (5) ◽  
pp. 790
Author(s):  
Antonio Díaz ◽  
Marta Tolentino
Keyword(s):  
Risk Management ◽  
Interest Rate ◽  
Interest Rates ◽  
Interest Rate Risk ◽  
Interest Rate Models ◽  
Management Measures ◽  
Interest Rate Risk Management ◽  
Embedded Options ◽  
The Interest Rate ◽  
Interest Rate Change

This paper examines the behavior of the interest rate risk management measures for bonds with embedded options and studies factors it depends on. The contingent option exercise implies that both the pricing and the risk management of bonds requires modelling future interest rates. We use the Ho and Lee (HL) and Black, Derman, and Toy (BDT) consistent interest rate models. In addition, specific interest rate measures that consider the contingent cash-flow structure of these coupon-bearing bonds must be computed. In our empirical analysis, we obtained evidence that effective duration and effective convexity depend primarily on the level of the forward interest rate and volatility. In addition, the higher the interest rate change and the lower the volatility, the greater the differences in pricing of these bonds when using the HL or BDT models.

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