Document Type



Online P2P (People-to-People or Peer-to-Peer) lending has very rapid development since it was appeared in 2005. In order to mitigate asymmetric information between borrowers and lenders, some online P2P market allows members building their social networks (such as Prosper, CommunityLend, PPDai etc). By empirical analyzing the transaction data of Prosper (largest P2P market in US) and PPDai (largest P2P market in China), the paper verifies that the social capital systems have a positive influence on borrower’s loan performance on the markets. However, on both markets, the loan interest rate mainly dependents on borrower’s hard information rather than their social capital. Furthermore, it concludes that borrower’ social network in PPDai is much more useful and effective than in Prosper by comparing the empirical results, which could be helpful for the credit system development of Chinese online P2P lending markets based on the conclusions.