Building Investor Trust in the P2P Lending Platform with a Focus on Chinese P2P Lending Platforms

As massive Chinese P2P platforms have failed due to moral risk and liquidity risk, which decreased investors confidence in P2P lending, the major question facing the future growth of P2P platforms is how to best build investors trust. This study was based on the elaboration likelihood model and examines how to persuade investors to develop initial trust in P2P platform. The empirical analysis results support the financial and credit status of P2P platforms are key elements in building the trust of investors. The social capital, risk management, and operating duration provide the necessary support to increase the number of platform investors. The average interest rate and the disclosure of information by the borrowers does not significantly affect the number of platform investors. These findings will facilitate future development efforts for p2p lending and the rational investments of investors.