Anmerkungen:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments March 12, 2022 erstellt
Beschreibung:
Using a theoretical model that assumes heterogeneity in lenders' screening ability and in borrowers' investment horizon, we show that fintech loans to entrepreneurs are more likely to be unsecured and short-term while bank loans are expected to be asset-backed and long-term. The findings suggest that fintech lenders substitute data for collateral to leverage their advantage in borrower screening. Nevertheless, as this advantage declines with loan's term, banks are able to leverage their own advantage stemming from lower collateral underwriting costs. The results offer a supply-side explanation for the recent proliferation of unsecured lending. We also provide theoretical justification for the empirical observations about credit availability and interest rates offered by fintechs and banks, drawn from the Federal Reserve's Small Business Credit Survey. The model can be used to derive predictions as borrowers' data availability and methods of analyzing these data improve