Background

Peer-to-peer lending has attracted considerable attention in recent years, largely because it offers a novel way of connecting borrowers and lenders. But as with other innovative approaches to doing business, there is more to it than that. Some might wonder, for example, what makes peer-to-peer lending so different–or, perhaps, so much better–than working with a bank, or why has it become popular in many parts of the world.

Certainly, the industry has witnessed strong growth in recent years. According to Business Insider, transaction volumes in the U.S. and Europe, the world’s leading P2P markets, have expanded at double and, in some cases, triple-digit percentage rates, bolstered by widespread acceptance of doing business online and a supportive regulatory environment.

For investors, "peer-2-peer lending," or "P2P," offers an attractive way to diversify portfolios and enhance long-term performance. When they invest through a peer-to-peer platform, they can profit from an asset class that has proven itself in both good times and bad. Equally important, they can avoid the risks associated with putting all their eggs in one basket, especially at a time when many experts believe that traditional favorites such as stocks and bonds are riskier than ever.

Default risk has long been a significant risk factor to test borrowers’ behaviour in Peer-to-Peer (P2P) lending. In P2P lending, loans are typically uncollateralized and lenders seek higher returns as compensation for the financial risk they take. In addition, they need to make decisions under information asymmetry that works in favor of the borrowers. In order to make rational decisions, lenders want to minimize the risk of default of each lending decision and realize the return that compensates for the risk.

As in the financial research domain, there are very few datasets available that can be utilized for building and analyzing credit risk models. This dataset will help the research community in building and performing research in the credit risk domain.

Content

This dataset has been retrieved from a publicly available data set of a leading European P2P lending platform, Bondora (https://www.bondora.com/en). The retrieved data is a pool of both defaulted and non-defaulted loans from the time period between February 2009 and July 2021. The data comprises demographic and financial information of borrowers and loan transactions.

Acknowledgements

The dataset has been downloaded from Bondora website