Factors affecting financial decision of lenders on indian p2p platforms-an empirical analysis

The article demonstrates the factors influencing the lenders investment decision on P2P market place specifically using the limited information classified as hard and soft, leading to “Information Asymmetry”. A questionnaire circulated to 400 respondents using stratified random sampling technique to examine the impact of variables under broad constructs namely, borrower's financials, demography, social relationship and trustworthiness. Applying exploratory and confirmatory factor analysis the study comprehend that borrower's demography and financials are significant constructs for reaching the lender's financial decision emphasising demographic variables as prominent factors with major preference to borrower's community, skin colour, birthplace and gender. EFA and CFA analysis depicted a model demonstrating relationship between the dominant constructs and factors classifying the investors into genotypes assigning them into developed clusters dominating the lenders decision in making their investment decision on P2P lending platforms.