A synthetic indicator of market leaders in the crowdlending sector

Abstract

PurposeThis study contributes to the limited literature on crowdlending by providing a data-driven analysis of the sector. A synthetic DP2 indicator is proposed to identify the leaders of the crowdlending market, the key factors behind their success and the medium-term competitive implications.Design/methodology/approachThe study examines 17 crowdlending platforms and eight performance indicators. The information provided by these indicators is aggregated using a synthetic indicator based on the P2 Distance (DP2) method.FindingsMintos, Evoestate, Peerberry, Bondster and Fellow Finance are the leading platforms. This method reveals the key variables in the identification of market leaders, namely year-on-year variation in the number of investors and year-on-year variation in lending per investor. The leaders in terms of lending volumes should not take their current situation for granted. Small and medium-sized platforms are pushing hard and may overtake the incumbents as market leaders.Practical implicationsFinancial intermediation through crowdlending is becoming an increasingly popular alternative to traditional models. Changes in the sector are expected in the coming years due to the rise of platforms with a moderate amount of lending and solid year-on-year improvement. To become leaders and to attract both lenders and borrowers, platforms are encouraged to improve the information that they provide.Originality/valueThis paper offers the first analysis of market leadership in the crowdlending sector. It analyses the competitive market of the crowdlending sector based on its actors and key factors. These factors explain the differences in the market position of different platforms. Based on this analysis, the trends in this sector can be identified. This study is exploratory, so it offers empirical data that can be useful in the development of theories that apply to the sector.

Investors’ confidence in the crowdlending platform and the impact of Covid-19

“…Crowdfunding, as an innovative financing method ( Ribeiro-Navarrete et al, 2021 c), has received much attention in recent years, which has boosted and expanded the general literature in this field ( Ribeiro-Navarrete et al, 2021b ; Grundy & Ohmer, 2016 ). Furthermore, authors such as Cumming et al, (2021) compared the differential impact of Covid-19 between different alternative sources of capital available to entrepreneurs such as bank consumer loans, P2P loans, and ECF and highlighted the relationship between them.…”

FinTech credit: uncovering knowledge base, intellectual structure and research front

“…(2021) show that banks that use financial technologies can reduce cost, improve customer service and risk management, and increase profitability levels. Ribeiro-Navarrete et al. (2021) highlight proliferation of crowdlending platforms and intense competition between them.…”

Communication of post-release plans in crowdfunding development initiatives: A signaling perspective

“…The findings elaborated on the impact of post-release outcomes and public attitudes toward the promise of funding development ideas. It is helpful to elaborate further on public opinion about the promise of crowdfunding development ideas, if and how those perceptions are changing, and how the industry and individual developers respond to support and maintain trust in the industry.Researchers can also expand on these insights by studying other forms of crowdfundingcrowdlending-where developers and the crowd need to engage in intensive, trustworthy financial and behavioral exchanges(Ribeiro-Navarrete et al 2021b). Finally, this study explored the cases' fundraising, development, and post-release stages.…”