SMEs and peer-to-peer business lending platforms in France

In 2014, the legal framework for peer-to-peer (P2P) business lending was put in place in France, breaking the monopoly of banks to lend to businesses. This has spurred a rapid growth of online platforms and has placed the French nascent market as the second-largest alternative finance industry in Europe. From the perspective of a borrower, P2P lending platforms perform the same function as banks. It is not clear, however, if platforms provide an opportunity for a disintermediated finance or whether they represent a new form financial intermediation. Unlike banks, P2P lending plaforms do not perform risk and maturity transformation and do not create money. It is in this context that we propose to undertake a comprehensive analysis of the French P2P business lending platforms. In particular, we would like to understand whether P2P lending platforms are competing with banks for the same borrowers or whether P2P lending platforms target borrowers excluded from banking credit.