Information Technology and Credit: Evidence from Public Guarantees

Filippo De Marco and Fabrizio Core

No 15799, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: This paper investigates whether banks' information technology (IT) can substitute for local branch presence in the provision of small business credit. Our identification strategy relies on loan-level data and the unique institutional features of the Italian public guarantee scheme during Covid-19. Despite the availability of online applications and low screening incentives, small business lending remains local, even for first-time borrowers. However, IT partly mitigates the impact of local branch presence: banks with better IT provide more, cheaper and faster guaranteed loans and lend more in areas where they have no bank branches, especially to first-time borrowers.

Keywords: Public guarantees; Covid-19; Liquidity constraints; Information technology; Lending relationships (search for similar items in EconPapers)
JEL-codes: G21 G28 (search for similar items in EconPapers)
Date: 2021-02
New Economics Papers: this item is included in nep-cfn, nep-eec and nep-ict
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (47)

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