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

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.

Automated summary

This study finds that private lending interest rate is the most significant influencing factor on the average interest rate of peer-to-peer microloans in China, with other factors also playing a role. Following changes in the Chinese P2P market after June 15, 2018, coefficients of certain influencing factors shifted, resulting in different impacts on interest rates.