Debt Collection in peer-to-peer lending market

Advisor: Juliano Assunção

P2P Lending connects borrowers and lenders via an online platform,
cutting out traditional banking intermediation. By bearing the risk of
borrowers defaulting on their loans, investors rely on the debt collection
process. This paper investigates whether state debt collection laws affect
the ability of debt collectors to recover charged-off debts. Results show that
stricter regulation are linked with lower recovery rates, which in turn leads
to extension of credit to safer borrowers.