Abstract:
The technological development of recent years has allowed a revolution in the financial sector with the introduction of new financing methods including Peer to Peer Lending. In this study it will be discussed the business model of Prosper, which is a Peer to Peer Lending platform that aims to facilitate the connection between borrowers and creditors by implementing the disintermediation process. To get a general idea of the theme that will be discussed later, the most discussed topics in recent literature regarding P2P platforms have been reported. In particular, it will be analysed the topics of the relationship with the banks, the importance of the information related to the users of the platform, the credit risk and the interest rate. Subsequently, the Prosper database will be studied in order to understand the real advantages of this platform. In particular, from the data provided by Prosper will be studied the various information concerning the borrowers and creditors. Then, the loans provided by the platform will be examined, and the risk adjusted interest rate will be calculated from their interest rate and credit risk. The objective of this document is to determine the adequacy of the interest rates proposed by Prosper and to establish the variables that influence them.
