The Correlation of Interest Rates between Online Peer-to-Peer Lending and Traditional Financial Markets

Abstract

As a representative of inclusive finance, online Peer-to-Peer lending (P2P) is getting mature, which has become an important part of China's financial markets. However, the relationship between P2P and traditional financial markets is not clear, and there are still few researches on online Peer-to-Peer lending interest rate from a macro perspective. Based on the data from March 2015 to May 2017, this paper studies the correlation of interest rates between P2P and traditional financial markets by multiple regression analysis. Results show that P2P interest rate is mainly affected by its own previous levels; both traditional private lending interest rate and Shibor have positive influence on the P2P interest rate; bond yield has a minor negative impact on the P2P interest rate; and stock return has no effect on the P2P interest rate.