An Overview of Online Alternative Finance

Masahiro Fukuhara
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Masahiro Fukuhara: Institution for a Global Society Corporation CEO/Founder Keio University Project Professor

Public Policy Review, 2020, vol. 16, issue 4, 1-19

Abstract: Online alternative finance is rapidly growing worldwide while driving financial inclusion thanks to the growing body of data made available by the expansion of cyberspace and the advancement of machine learning and other technology. The epicenter of the growth is China, but online alternative finance is also continuing to grow in developed countries, such as the United States and the United Kingdom, through the creation of new market segments and a shift from some existing financial institutions. The sort of information used for loan screening in the case of online alternative finance is different from that used in the case of finance provided by existing financial institutions. There are even cases where credit history information is not used. Even when credit history information is used, the range of additional data used for loan screening is expanding to include information related to electronic commerce (EC) sites, in the case of corporate borrowers, and detailed information on personality and academic achievement and the history of residential moving, in the case of individual borrowers. This paper provides an overview of the current state of online alternative finance, conducts an empirical and analytical survey on screening methods, and looks at specific cases of online alternative finance.

Keywords: fintech; online finance; big data; AI; loan screening; financial inclusion (search for similar items in EconPapers)
JEL-codes: G2 M2 (search for similar items in EconPapers)
Date: 2020
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