FinTech Lending and Bank Credit Access for Consumers

Tetyana Balyuk ()
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Tetyana Balyuk: Goizueta Business School, Emory University, Atlanta, Georgia 30322

Management Science, 2023, vol. 69, issue 1, 555-575

Abstract: Using a unique setting of an online peer-to-peer lender, I show that banks expand credit access for consumers who obtain FinTech loans. Consistent with FinTech relieving information frictions, this effect is stronger for more credit-constrained consumers. Many borrowers, especially higher-quality ones, use peer-to-peer loans to repay expensive revolving debt. Yet, debt financing and credit score changes cannot fully explain higher bank credit. The increase in bank credit access is stronger when information sets between banks and peer-to-peer lenders diverge more. These results highlight information spillovers as a novel mechanism through which FinTech lending can relieve financial constraints for consumers.

Keywords: bank credit; consumer finance; FinTech; information; peer-to-peer lending (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (8)

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Persistent link: https://EconPapers.repec.org/RePEc:inm:ormnsc:v:69:y:2023:i:1:p:555-575

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