The Role of Marketplace Lending in Credit Markets: Evidence from Bank Mergers

Panagiotis Avramidis, Nikolaos Mylonopoulos, George G. Pennacchi

Research output: Contribution to journalArticlepeer-review


We develop a model of competition between banks and a marketplace lender to motivate empirical tests using local market data on U.S. banks and the largest marketplace lending platform. Employing mergers of large, multimarket banks as an exogenous credit supply shock, we find that marketplace lending absorbs unmet demand for consumer credit following a decline in the availability of bank credit. Merger-induced bank branch closings lead to an increase in marketplace loan requests and loan acceptance rates, particularly for debt consolidation loans to lower-risk consumers. We also find that marketplace lending mitigates credit distress in local economies affected by mergers.

Original languageEnglish (US)
Pages (from-to)3090-3111
Number of pages22
JournalManagement Science
Issue number4
StatePublished - Apr 2022


  • bank mergers
  • community credit stress
  • consumer credit
  • marketplace lending

ASJC Scopus subject areas

  • Strategy and Management
  • Management Science and Operations Research


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