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

Author

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  • Gisbert, Josep
  • Gutierrez, Jose E.

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.

Suggested Citation

  • Gisbert, Josep & Gutierrez, Jose E., 2024. "Bridging the gap? A theoretical analysis of the net effect of FinTech entry on access to credit," Finance Research Letters, Elsevier, vol. 69(PA).
    • Handle: RePEc:eee:finlet:v:69:y:2024:i:pa:s1544612324009486
    DOI: 10.1016/j.frl.2024.105918
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    More about this item

    Keywords

    FinTech; Financial inclusion; Soft information; Regulatory arbitrage; Economic growth; Financial stability;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation

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