SPONEROVÁ, Martina and Miroslav SPONER. Social Lending and its Risks. Online. In Svatopluk Kapounek, Veronika Krůtilová. 19th International Conference Enterprise and Competitive Environment 2016, ECE 2016. Brno: Mendel University in Brno, 2016, p. 330-337. ISSN 1877-0428. Available from: https://dx.doi.org/10.1016/j.sbspro.2016.05.506.
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Basic information
Original name Social Lending and its Risks
Authors SPONEROVÁ, Martina (203 Czech Republic, guarantor, belonging to the institution) and Miroslav SPONER (203 Czech Republic, belonging to the institution).
Edition Brno, 19th International Conference Enterprise and Competitive Environment 2016, ECE 2016, p. 330-337, 8 pp. 2016.
Publisher Mendel University in Brno
Other information
Original language English
Type of outcome Proceedings paper
Field of Study 50200 5.2 Economics and Business
Country of publisher Czech Republic
Confidentiality degree is not subject to a state or trade secret
Publication form electronic version available online
WWW Procedia - Social and Behavioral Sciences
RIV identification code RIV/00216224:14560/16:00091155
Organization unit Faculty of Economics and Administration
ISSN 1877-0428
Doi http://dx.doi.org/10.1016/j.sbspro.2016.05.506
UT WoS 000386948700039
Keywords in English peer-to-peer financing; peer-to-peer lending platforms; risk; corporate entities; risk assessment
Changed by Changed by: Mgr. Kateřina Oleksíková, Ph.D., učo 240814. Changed: 28/4/2017 13:43.
Abstract
Czech companies discover alternative non-banking financing of their business. Social lending known as peer to peer (P2P) financing has started to appear on the Czech market. P2P lending is a new platform of financial transactions that bypasses traditional intermediaries by directly connecting borrower and lenders. But there is an information asymmetry between lenders and borrowers to which online P2P lending platforms have to face. As many loans are not secured by collateral, the assessment of the borrower´s creditworthiness is very important. The aim of this article is to define risks of investments to P2P loans and propose the elimination of these risks. We went through studies focused on default of corporate entities which were done in different countries and selected some of them. We have chosen these studies because their research is focused not only on financial indicators assessment but also on non-financial indicators assessment and use econometric models to measure probability of default. These studies also confirmed well known basic relations which should be taken into consideration by lenders - higher profitability, higher liquidity and higher volume of assets means lower risk of default, while higher indebtedness and higher leverage means higher risk of default. Czech companies discover alternative non-banking financing of their business. Social lending known as peer to peer (P2P) financing has started to appear on the Czech market. P2P lending is a new platform of financial transactions that bypasses traditional intermediaries by directly connecting borrower and lenders. But there is an information asymmetry between lenders and borrowers to which online P2P lending platforms have to face. As many loans are not secured by collateral, the assessment of the borrower´s creditworthiness is very important. The aim of this article is to define risks of investments to P2P loans and propose the elimination of these risks. We went through studies focused on default of corporate entities which were done in different countries and selected some of them. We have chosen these studies because their research is focused not only on financial indicators assessment but also on non-financial indicators assessment and use econometric models to measure probability of default. These studies also confirmed well known basic relations which should be taken into consideration by lenders - higher profitability, higher liquidity and higher volume of assets means lower risk of default, while higher indebtedness and higher leverage means higher risk of default. Czech companies discover alternative non-banking financing of their business. Social lending known as peer to peer (P2P) financing has started to appear on the Czech market. P2P lending is a new platform of financial transactions that bypasses traditional intermediaries by directly connecting borrower and lenders. But there is an information asymmetry between lenders and borrowers to which online P2P lending platforms have to face. As many loans are not secured by collateral, the assessment of the borrower´s creditworthiness is very important. The aim of this article is to define risks of investments to P2P loans and propose the elimination of these risks. We went through studies focused on default of corporate entities which were done in different countries and selected some of them. We have chosen these studies because their research is focused not only on financial indicators assessment but also on non-financial indicators assessment and use econometric models to measure probability of default. These studies also confirmed well known basic relations which should be taken into consideration by lenders - higher profitability, higher liquidity and higher volume of assets means lower risk of default, while higher indebtedness and higher leverage means higher risk of default.
Links
MUNI/A/1025/2015, interní kód MUName: Hrozby a výzvy prostředí přetrvávajících nízkých úrokových sazeb pro vývoj a stabilitu finančního systému (Acronym: FinStabilita)
Investor: Masaryk University, Category A
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