Research Seminar Program - Melissa Porras Prado (Nova School of Business and Economics)
Online only via Zoom - details to be provided
Title: The Real Effects of FinTech Lending on SMEs
Abstract: We study the effect of FinTech lending on credit markets and real economic activity using loan application data from a peer-to-business platform. We find that FinTech serves creditworthy small businesses that already have access to bank credit, allowing them to obtain long-term unsecured loans and reduce exposure to lower-quality banks. Firms with access to Fintech loans increase investment, employment, and output, compared to those whose loan applications are rejected. We identify these effects by exploiting exogenous variation in the probability of obtaining a FinTech loan due to bank branch presence. Our findings suggest that FinTech lending spurs small business growth.