Research published by two University of Queensland students has revealed that peer-to-peer lenders are more inclined to accept reduced economic returns they are funding is socially and environmentally responsible if they know the project.
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 thanks that are possible a scholarship given by two UQ alumni.
Included in the research, the pair examined data from the popular Australian peer-to-peer lending platform and discovered that tiny green loans – averaging around $8000 and utilized mostly for renewable power tasks such as for example installing rooftop solar – had a 2.1 % reduced rate of interest compared to a comparable loan useful for other purposes.
Mr Lejcak stated while green loans comprised a little slice regarding the peer-to-peer financing market, they certainly were a fast-growing group of loan needs.
“Peer-to-peer monetary financing platforms offer people and smaller loan providers with all the chance to partake in social impact investing, which can be usually outside of the scope of banking institutions and larger loan providers, ” he said.
“once you think about the economy that is sharing many people consider Uber (transportation) and AirBnB (accommodation), but peer-to-peer financing is a very exciting and competitive area that is setting up brand brand new and transforming current markets. ”
Mr Wiltshire stated he would like to see peer-to-peer platforms follow a social effect metric for loan demands.
“If these platforms could provide peer-to-peer loan providers usage of an impact that is social, alongside the currently available credit score metrics, we think it might attract a bigger market and increase the financing task on these platforms, ” he said.
“In Australia, the sector continues to be quite tiny and unregulated, even though there’s nevertheless much to explore and realize, our research implies 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 of this Matthew McLennan and Richard Howes Outstanding Honours Collaboration Scholarship, that was created in 2014 and encourages teamwork between high-performing honours pupils through the UQ company School and class of Economics.
Mr Wiltshire stated taking care of this innovative research that is peer had provided numerous personal and expert development possibilities.
“Beyond developing our research abilities, i came across it valuable to achieve experience of perspectives that are different from Jason and our scholastic advisors – and learn to bring our tips, experiences and abilities together to look at and subscribe to the discussion on this pressing issue. ”
Mr Lejcak thanked Mr McLennan and Mr Howes for providing this substantial scholarship.
“As a pupil, comprehending that you have UQ’s strong alumni system nowadays prepared and happy to give you support, that is 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 worldwide Markets Analysts at Citi Bank in Sydney in February 2019.
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