Shadow Banking in a Crisis: Evidence from FinTech during COVID-19
Journal of Financial and Quantitative Analysis
; 2021.
Article
in English
| Scopus | ID: covidwho-1331351
ABSTRACT
We analyze lending by traditional as well as FinTech lenders during COVID-19. Comparing samples of FinTech and bank loan records across the outbreak, we find that FinTech companies are more likely to expand credit access to new and financially constrained borrowers after the start of the pandemic. However, this increased credit provision may not be sustainable;the delinquency rate of FinTech loans triples after the outbreak, but there is no significant change in the delinquency of bank loans. Borrowers holding both loan types prioritize the payment of bank loans. These results shed light on the benefits provided by shadow banking in a crisis and hint at the potential fragility of such institutions when delinquency rates spike. © 2021 Cambridge University Press. All rights reserved.
Full text:
Available
Collection:
Databases of international organizations
Database:
Scopus
Language:
English
Journal:
Journal of Financial and Quantitative Analysis
Year:
2021
Document Type:
Article
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