Marketplace Lending: Industry Overview and Lending Club Data Analysis

Abstract

This project aims to provide a framework for conceptualizing and analyzing the rapidly growing marketplace lending space. The project provides a clear and concise introduction to marketplace lending, its dynamic ecosystem, the industry’s rapid growth, and the perspectives of various stakeholders including marketplace lending platforms, partner banks, and regulators. A further dive into the perspectives of the previously mentioned stakeholders is then taken on through the statistical analysis of Lending Club historical loan data from 2007-2020Q3. The data analysis portion of the project includes logistic regression models for predicting loan outcomes, determining the correlation of different pools of marketplace loans with macroeconomic indicators over time, and multiple regression models for predicting interest rates on loans categorized by loan purpose. Each portion of the data analysis aligns with a different stakeholder objective, and the paper hopes to pave the way for future academic research in the space.