What is the role of FinTech lenders in small business lending markets? with Assistant Professor Huan Tang (LSE)
Using French administrative data, we show that, relative to similar firms taking new bank loans, SMEs that take a FinTech loan borrow 20% more from banks in the next two years. The effect is more pronounced for low-collateral firms and when the FinTech loan finances the acquisition of tangible assets. This is consistent with firms using uncollateralized FinTech loans to acquire assets that they can pledge to obtain bank loans. We also find evidence that firms use FinTech loans to meet urgent liquidity needs. In contrast, we find no evidence of a superior screening ability of FinTech lenders.
Huan Tang is an assistant professor of finance at the London School of Economics. Her areas of expertise are FinTech, banking, and digital economy. In her recent work, she combines novel data and theory-motivated empirical approach to understand the benefits and costs of FinTech innovations for households and firms. She is the recipient of the 2020 AQR Top Finance Graduate Award and various best research paper awards. Huan Tang received a PhD in Finance in 2020 from HEC Paris.
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Friday 11 February 2022, 14:00 - 15:00
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