FinTech Lending When Things Look Gloomy, Friend or Foe? Open Access

Wu, Fiona Jiaqi (Summer 2021)

Permanent URL:


Applying a random forest classification model to construct Prosper’s rating distribution as if in a normal economic condition, I demonstrate that the FinTech peer to peer lending platforms such as Prosper modified the risk signals it sent to investors facing an unexpected, sudden, exogenous economic shock caused by the Covid-19. I show that investors are more risk averse during a recession; adjusting investors’ perceptions on borrowers risk levels by making some borrowers look safer would increase loans’ probabilities to be funded. FinTech lending firms facilitate liquidities in the credit market, a precious diamond during an economic downturn, while investors are likely being under-compensated with the amount of risks undertaken.

Table of Contents



Section 1

1.1         P2 Market Overview

1.2         Prosper Background

1.3         Data Description

1.4         Methodology

1.5         Feature Selections


Section 2 - Summary of Findings

2.1     Prediction Accuracy

2.2     Prosper Rating Distribution

2.3     Investor Attention to Risk Signal

2.4         Investor Risk Aversion


Section 3

3.0      Motivations





About this Master's Thesis

Rights statement
  • Permission granted by the author to include this thesis or dissertation in this repository. All rights reserved by the author. Please contact the author for information regarding the reproduction and use of this thesis or dissertation.
Subfield / Discipline
  • English
Research Field
Committee Chair / Thesis Advisor
Committee Members
Last modified

Primary PDF

Supplemental Files