The Social Science Behind Social Lending
In This Chapter
• Why social lending appeals to both borrowers and lenders
• How peer pressure affects success in social lending, particularly in Prosper groups
• How the popularity of social networking has made us comfortable with online lending
• Do’s and don’ts for borrowers, lenders, and those involved in Prosper groups
Recent research by Rice University’s Jones Graduate School of Management found that online P2P lending sites are more attractive to people than banks. The study “The Democratization of Personal Consumer Loans?” analyzed a database of 5,370 P2P loans from Prosper.
The research brought some important points to light:
• Borrowers are attracted to P2P lending because they can get ...