Integrating ESG and Behavioural Factors in Marketplace Lending: A Structural Equation Modeling Analysis of Borrower Repayment Decisions

This study investigates the determinants of borrower repayment intentions in Marketplace Lending (MPL) platforms, focusing on the interplay between behavioural factors and Environmental, Social, and Governance (ESG) awareness in the Hungarian context. A Partial Least Squares Structural Equation Modelling (PLS-SEM) approach was employed to analyze survey responses from 477 participants familiar with MPL platforms. The study integrates constructs from behavioural finance (Perceived Usefulness, Perceived Ease of Borrowing, Theory of Planned Behaviour) and ESG-related factors (Socially Responsible Investment Theory, Reciprocity Theory) to assess their influence on repayment intentions. Perceived Usefulness (PU) emerged as the strongest predictor of Repayment Intention (RI) (β = 0.554, p < 0.001), highlighting the importance of platform functionality. Socially Responsible Investment Theory (SRIT) also had a significant positive impact (β = 0.194, p < 0.01), suggesting that ethical lending practices enhance borrower accountability through reciprocity mechanisms. Conversely, Continuance Intention to Borrow (CIB) and Credit Risk Theory (CRT) showed no significant effects. This study contributes to the literature by bridging behavioural finance, credit risk theory, and ESG principles in FinTech lending, offering a novel framework for sustainable lending practices.