publication

How FinTech enters China's credit market

Authors:
Harald HAU
Yi HUANG
Hongzhe SHAN
Zixia SHENG
2019

How does FinTech credit mitigate local credit supply frictions in China's segmented credit market? In our simple theoretical models, we show that FinTech credit (i) expands the extensive margin of credit to borrowers of lower credit scores and (ii) provides relatively more credit to borrowers with lower credit scores. We confirm both predictions based on comprehensive data from one of China's largest FinTech credit providers.