HKS Affiliated Authors
Director, Center for International Development
Sumitomo-FASID Professor of International Finance and Development
Excerpt
Excerpt
Screening Peers Softly: Inferring the Quality of Small Borrowers. Asim Ijaz Khwaja, May 1, 2013, Paper. "The recent banking crisis highlights the challenges faced in credit intermediation. New online peer-to-peer lending markets offer opportunities to examine lending models that primarily cater to small borrowers and that generate more types of information on which to screen. This paper evaluates screening in a peer-to-peer market where lenders observe both standard financial information and soft, or nonstandard, information about borrower quality. Our methodology takes advantage of the fact that while lenders do not observe a borrower’s exact credit score, we do..." Link