Jill M. Baren, President, Lake Forest College | Lake Forest College
Jill M. Baren, President, Lake Forest College | Lake Forest College
Lake Forest College professors and students challenge conventional wisdom with groundbreaking research.
For years, the assumption was simple: in areas where traditional banks disappear, peer-to-peer (P2P) lending platforms like Prosper would step in to fill the void. But a recent research study led by Professor of Economics Rob Lemke and Associate Professor of Finance Nancy Tao with student researchers Belen Cuadros ’25 and Zofia Czarnik ’25, has turned that narrative on its head.
Their co-authored study, published in Managerial Finance, reveals that P2P lending doesn’t replace banks—it complements them. In fact, both systems thrive best when they coexist.
The research took place last summer, supported by funding from the Rosemary Hale Fund for Teaching and Research. That financial support made it possible for the team to use four critical datasets:
- Census data
- Bank data
- Credit union data
- Peer-to-peer loan data from Prosper
Cuadros, an economics and data science double major, and Czarnik, an economics major who is double-minoring in politics and legal studies, worked closely with their professors, applying the knowledge they gained from the Richter Scholar Program and the James Rocco Data Research Scholarship to analyze the data and interpret the findings. What they discovered came as a surprise.
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