Shaping crowdlending investors’ trust: Technological, social, and economic exchange perspectives

The rise of crowdlending enables small firms to borrow capital where transaction costs are reduced and financial accessibility is improved. Crowdlending platforms require lenders to depend solely on the information provided by its borrowers. Such information reliance could impact lenders’ financial behavior and investment decision and return. In this study, we develop a model to understand what elements and factors influence the formation of trust in crowdlending. Our results suggest that lenders are likely to pay more attention to platform quality and risk mitigation strategy than attractive loan cues. Our findings can aid the crowdlending industry in growing its investor base and increasing potential customers’ access to capital. These findings could also assist in developing regulatory guidelines in the crowdlending market.