Online Financing without FinTech: Evidence from Online Informal Loans
Journal of Economics and Business
; : 106080, 2022.
Article
in English
| ScienceDirect | ID: covidwho-1983403
ABSTRACT
We present the first comprehensive dataset on an online informal micro-lending community. These informal loans are small, short duration and high-cost. Using our unique micro data, and the Covid-19 pandemic as a laboratory, we uncover different types of information contained on loan terms and on the narratives of market participants. First, loan terms reflect the aggregate economic context of borrowers and lenders. Second, narratives among market participants contain additional and timely information about aggregate and individual borrower circumstances. Third, lenders imperfectly screen on both loan terms and narrative information. These findings highlight the role of data in FinTech. Transparency on micro-loans can improve the efficiency of the credit market, democratizing access to finance for borrowers, while protecting lenders.
Full text:
Available
Collection:
Databases of international organizations
Database:
ScienceDirect
Language:
English
Journal:
Journal of Economics and Business
Year:
2022
Document Type:
Article
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