Bridging the gap? A theoretical analysis of the net effect of FinTech entry on access to credit

Josep Gisbert and Jose E. Gutierrez

Finance Research Letters, 2024, vol. 69, issue PA

Abstract: FinTech lenders offer an opportunity to enhance credit access but may also disrupt traditional banking. This study proposes a theoretical framework for analyzing the net impact of FinTech’s entry on access to credit in credit markets dominated by conventional banks. When a FinTech lender enters the market, competition intensifies, which reduces the bank’s gain in serving certain customer segments. While FinTech lending can help serve some unattended niches, it may cause the bank to abandon others, leading to an ambiguous or even negative impact on access to credit.

Keywords: FinTech; Financial inclusion; Soft information; Regulatory arbitrage; Economic growth; Financial stability (search for similar items in EconPapers)
JEL-codes: G21 G23 G28 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:69:y:2024:i:pa:s1544612324009486

DOI: 10.1016/j.frl.2024.105918

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