Peer-to-peer lending is poised for continued growth, say Cleveland Fed researchers

Peer-to-peer lending has been growing rapidly and is poised for continued growth, say Federal Reserve Bank of Cleveland researchers Yuliya Demyanyk and Daniel Kolliner. Matching individual borrowers with investors, peer-to-peer lending fills at least two gaps left by traditional lending sources.

First, say the researchers, peer-to-peer lending can improve access to credit for individuals who have short credit histories. Peer-to-peer lenders use income, type of employment, and even SAT scores, in addition to credit scores and histories, to assess the creditworthiness of borrowers.

Second, peer-to-peer lending allows many consumers to consolidate credit card debt and lower their interest rate more than going through traditional lenders.

Read Peer-to-Peer Lending Is Poised to Grow

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Federal Reserve Bank of Cleveland

The Federal Reserve Bank of Cleveland is one of 12 regional Reserve Banks that along with the Board of Governors in Washington DC comprise the Federal Reserve System. Part of the US central bank, the Cleveland Fed participates in the formulation of our nation’s monetary policy, supervises banking organizations, provides payment and other services to financial institutions and to the US Treasury, and performs many activities that support Federal Reserve operations System-wide. In addition, the Bank supports the well-being of communities across the Fourth Federal Reserve District through a wide array of research, outreach, and educational activities.

The Cleveland Fed, with branches in Cincinnati and Pittsburgh, serves an area that comprises Ohio, western Pennsylvania, eastern Kentucky, and the northern panhandle of West Virginia.

Media contact

Doug Campbell, doug.campbell@clev.frb.org, 513.218.1892