How FinTech Enters China’s Credit Market

AER Papers and Proceedings 2019, 109: 60-64
with Yi Huang, Hongzhe Shan and Zixia Sheng

Abstract

Online trading platforms generate abondant vendor and consumer data accessible for credit analysis. Big data can thus give birth to FinTech firms that use both cheaper (on-line) distribution channels and better credit analysis to compete with traditional bank credit. China has been at the forefront of these developments due to the pervasive use of online trading platforms and an underdeveloped banking system which excludes large segments of the rural and bank remote population from traditional bank credit. This article documents stylized facts about the entry of FinTech credit into China’s credit market for small firm (vendor) credit.

Additional Files

A technical Web Appendix with the proofs you find here.

Media Coverage