Information quality for P2P platform selection in a global environment

Abstract

Online lending platforms are evolving rapidly, providing additional opportunities for smaller market payers to get financing and, from the oth er side, to invest savings. The market is online, thus potentially open for any country in the world, but should apply to specific regulations and perceptions that vary among countries. In lending process the most important is the problem of asymmetric inf ormation and its consequences, thus the information and its disclosure is critical. Without legal disclosure and transparency requirements, the information and tools supporting the lending decision and procedures dealing with payment overdue are mostly dep endent on platform organizers. The default risk falls on lenders, usually having limited proficiency in credit risk valuation and portfolio formation. The paper deals with lending or investment side, applying the main question: what are the information qua lity determinants when making the decision for P2P platform selection. P2P allows to act globally, but information provided should apply common requirements and standards and be equally understandable for geographically different lenders. As the result the information quality criteria are proposed, including web/platform, company related, borrower and loan type information, and then tested on Lithuanian and few European platforms for comparison purposes. The results revealed that information content provide d is abundant with size of the platform, although the financial transparency, as well as information comparability and comprehensiveness are limited.