Peer-to-peer lending could help small firms find funds, but careful handling is needed

Small and medium-sized companies have trouble raising money and that’s a problem, since they account for a large part of the global economy. If there was a way to make it easier for them to get cash, everyone would benefit.

Peer-to-peer lending could be one answer.

P2P lending, as it is known, matches investors with individuals and companies looking for funds. It’s an internet-based process that is part of a booming field called financial technology, or fintech for short.

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About the authors
Naoko Nemoto is a financial economist at the ADBI.
David Storey is a graduate student of economics at the University of Warwick and former research associate at ADBI.
Bihong Huang is a research fellow at ADBI.

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