Working Paper: NBER ID: w29421
Authors: Tobias Berg; Andreas Fuster; Manju Puri
Abstract: In this paper, we review the growing literature on FinTech lending – the provision of credit facilitated by technology that improves the customer-lender interaction or lenders’ screening and monitoring of borrowers. FinTech lending has grown rapidly, though in developed economies like the U.S. it still only accounts for a small share of total credit. An increase in convenience and speed appears to have been more central to FinTech lending’s growth than improved screening or monitoring, though there is certainly potential for the latter, as is the case for increased financial inclusion. The COVID-19 pandemic has shown potential vulnerabilities of FinTech lenders, although in certain segments they have displayed rapid growth.
Keywords: No keywords provided
JEL Codes: G2; G20; G21; G23
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| fintech lending (G21) | access to credit (G21) |
| fintech lending (G21) | pricing changes among borrowers (G21) |
| easy access to credit (G21) | overborrowing (H74) |
| fintech lending (G21) | higher delinquency rates (G33) |
| technology adoption (O33) | lending efficiency (G21) |
| fintech lenders (G21) | improved screening and monitoring (I10) |
| fintech lenders (G21) | competitive advantage over traditional banks (G21) |
| fintech lending (G21) | improved customer-lender interaction (G21) |