What is it about?
To better understand consumer behaviour in online borrowing, we use nationally representative survey data in China to explore factors affecting consumer use of one type of online borrowing, person to person (P2P) borrowing.
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Why is it important?
The advance of Internet technology has provided a convenient market platform for matching lending and borrowing parties, but many consumers still hesitate to use online borrowing. Through empirical analyses, we find that financing knowledge and risk attitude are two key factors associated with P2P borrowing. Results show that financing knowledge is directly associated with P2P borrowing, while risk attitude through an instrument variable is associated with P2P borrowing also. Given these results, an effective way to expand the consumer Internet borrowing market in China is to enhance consumer financial literacy education.
Perspectives
Findings of this study are informative for policy makers, business practitioners, and consumer educators to help consumers use P2P borrowing more effectively for achieving consumer economic wellbeing.
Dr. Jing Jian Xiao
University of Rhode Island
Read the Original
This page is a summary of: Financing Knowledge, Risk Attitude, and P2P Borrowing in China, International Journal of Consumer Studies, October 2018, Wiley,
DOI: 10.1111/ijcs.12494.
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