SMEs alternative financing using P2P lending platform
Zohra Aney, Fatema Tuz (2021)
2021
Master's Programme in Leadership for Change
Johtamisen ja talouden tiedekunta - Faculty of Management and Business
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Hyväksymispäivämäärä
2021-05-27
Julkaisun pysyvä osoite on
https://urn.fi/URN:NBN:fi:tuni-202105104780
https://urn.fi/URN:NBN:fi:tuni-202105104780
Tiivistelmä
This paper aims to focus on how peer-to-peer(P2P) lending can help Small and Medium-sized Enterprises (SMEs) to get the required finance. P2P lending as an alternative financing solution has gained tremendous popularity throughout the world. This paper will investigate factors that could expedite SMEs to use p2p lending for their fund. Further, this paper will investigate the information asymmetry problem in SMEs along with some other issues, for example, collateral, management expertise, transaction cost, and interest rate. Next, the paper will explore the scope of P2P lending in mitigating these roadblocks including the information asymmetry problem in SMEs financing.
Qualitative research method was applied in this paper to collect data from semi-structured interview. To analyze the data, thematic approach was used. The analysis concedes about the financial problem of SMEs. Mostly, along with other obstacles, information asymmetry issue caused majority of the constraints in SMEs financing. However, P2P lending has great potential to mitigate the ongoing financial problems of SMEs. Though, P2P are facing troubles due to collateral free loan, high interest rate and poor credit assessment tool. Furthermore, analysis proposed, to ensure the healthy growth and development of SMEs, P2P lending is essential. P2P lending, with the technological adoption may mitigate the ongoing roadblocks in SMEs financing.
Qualitative research method was applied in this paper to collect data from semi-structured interview. To analyze the data, thematic approach was used. The analysis concedes about the financial problem of SMEs. Mostly, along with other obstacles, information asymmetry issue caused majority of the constraints in SMEs financing. However, P2P lending has great potential to mitigate the ongoing financial problems of SMEs. Though, P2P are facing troubles due to collateral free loan, high interest rate and poor credit assessment tool. Furthermore, analysis proposed, to ensure the healthy growth and development of SMEs, P2P lending is essential. P2P lending, with the technological adoption may mitigate the ongoing roadblocks in SMEs financing.