Research published by two University of Queensland students has revealed that peer-to-peer loan providers are more inclined to accept reduced economic returns when they understand the project these are typically funding is socially and environmentally accountable.
Jason Lejcak (Bachelor of Economics (Honours)) and Benjamin Wiltshire (Bachelor of Commerce (Honours) and Bachelor of Science) co-authored the research included in an investigation task with UQ’s Australian Institute for company and Economics (AIBE), that was made feasible because of a scholarship given by two UQ alumni.
The pair examined data from a popular Australian peer-to-peer lending platform and found that small green loans – averaging around $8000 and used largely for renewable energy projects such as installing rooftop solar – had a 2.1 per cent lower interest rate than a comparable loan used for other purposes as part of the study.
Mr Lejcak stated while green loans comprised a little piece for the lending that is peer-to-peer, these people were a fast-growing sounding loan demands.
“Peer-to-peer economic financing platforms provide people and smaller loan providers because of the chance to partake in social impact investing, which will be usually beyond your range of banks and larger loan providers, ” he said.
“once you think about the sharing economy, a lot of people think about Uber (transportation) and AirBnB (accommodation), but peer-to-peer financing is a very exciting and competitive area that’s setting up brand brand new and transforming existing markets. ”
Mr Wiltshire stated he would like to see peer-to-peer platforms follow a social effect metric for loan needs.
“If these platforms could offer peer-to-peer loan providers usage of a social effect metric, alongside the now available credit score metrics, we think it might attract a bigger audience and increase the financing task on these platforms, ” he said.
“In Australia, the sector continues to be quite tiny and unregulated, and even though there’s nevertheless much to explore and realize, our research shows applying a social impact metric could replace the game for renewable power lending on peer-to-peer platforms. ”
Mr Lejcak and Mr Wiltshire will be the 2018 recipients associated with Matthew McLennan and Richard Howes Outstanding Honours Collaboration Scholarship, that has been created in 2014 and encourages teamwork between high-performing honours pupils through the UQ company class and class of Economics.
Mr Wiltshire stated taking care of this revolutionary peer research study had provided numerous individual and professional development possibilities.
“Beyond developing our research abilities, i came across it valuable to get contact with various perspectives – from Jason and our scholastic advisors – and learn to bring our some ideas, experiences and abilities together to look at and donate to the conversation about this pressing issue. ”
Mr Lejcak thanked Mr McLennan and Mr Howes for providing this scholarship that is generous.
“As a pupil, understanding that you have UQ’s strong alumni system on the market prepared and ready to give you support, that’s a really big plus, and also this alumni-funded scholarship is a good example of that. It’s amazing. ”
Both students graduated from UQ in December 2018 and commenced as international areas Analysts at Citi Bank in Sydney in February 2019.
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