The Rise of Finance Companies and FinTech Lenders in Small Business Lending
We document that finance companies and FinTech lenders increased lending to small businesses after the 2008 financial crisis. We show that most of the increase substituted for a reduction in bank lending. In counties in which banks had a larger market share before the crisis, finance companies and F...
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| Published in: | The Review of financial studies Vol. 35; no. 11; pp. 4859 - 4901 |
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| Main Authors: | , |
| Format: | Journal Article |
| Language: | English |
| Published: |
01-11-2022
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| Online Access: | Get full text |
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| Summary: | We document that finance companies and FinTech lenders increased lending to small businesses after the 2008 financial crisis. We show that most of the increase substituted for a reduction in bank lending. In counties in which banks had a larger market share before the crisis, finance companies and FinTech lenders increased their lending more. We find no effect of reduced bank lending on employment, wages, and new business creation by 2016. Our results suggest that finance companies and FinTech lenders are major suppliers of credit to small businesses and played an important role in the recovery from the 2008 financial crisis.
Authors have furnished an Internet Appendix, which is available on the Oxford University Press Web site next to the link to the final published paper online |
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| ISSN: | 0893-9454 1465-7368 |
| DOI: | 10.1093/rfs/hhac034 |