Inaccurate Information in Marketplace Loans

Item Type Monograph (Working Paper)
Abstract Inaccuracy of borrower-provided information in marketplace loans for credit card debt repayment and consolidation contains information about credit risk. I identify inaccuracies based on three indicators: consistency of loan amount with outstanding credit balance, roundness of reported income, and roundness of chosen loan amount. An Inaccuracy Index constructed from these indicators has significant predictive power over the likelihood of default, and the additional default risk is not compensated by higher interest. Inaccurate information is more prevalent in areas with lower social capital, implying weaker social norms, among borrowers whose professions are considered less honest, and among borrowers with higher genuine income uncertainty.
Authors Pursiainen, Vesa
Language English
Subjects finance
Date 2021
Official URL https://papers.ssrn.com/sol3/papers.cfm?abstract_i...
Depositing User Prof. PhD Vesa Pursiainen
Date Deposited 06 Dec 2021 14:01
Last Modified 01 Apr 2022 13:11
URI: https://www.alexandria.unisg.ch/publications/265096

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Pursiainen, Vesa: Inaccurate Information in Marketplace Loans. , 2021,

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https://www.alexandria.unisg.ch/id/eprint/265096
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