Filling the Gap: Digital Credit and Financial Inclusion

August 7, 2020

Preview Citation

Format: Chicago

Majid Bazarbash, and Kimberly Beaton. Filling the Gap: Digital Credit and Financial Inclusion, (USA: International Monetary Fund, 2020) accessed September 19, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

Can fintech credit fill the credit gap in the consumer and business segments? There are few cross-country studies that explore this question. Focusing on marketplace lending, an important part of fintech credit, we use data for 109 countries from 2015 to 2017 to study the relationship between fintech credit to businesses and consumers and various aspects of financial development. Marketplace lending to consumers grows in countries where financial depth declines highlighting the role of fintech credit in filling the credit gap by traditional lenders. This result is particularly strong in low-income countries. In the business segment, marketplace lending expands where financial efficiency declines. Our findings show that low-income countries take advantage of the fintech credit opportunity in the consumer segment but face important challenges in the business segment.

Subject: Banking, Credit, Financial inclusion, Financial markets, Financial sector development, Fintech, Money, Peer-to-peer lending, Technology

Keywords: Asia and Pacific, Balance sheet lending, Bank lending, Composition of marketplace lending, Consumer lending, Consumer lending from Lending Club, Credit, Cross-country difference, Development of marketplace lending, Digital Credit, Europe, Finance activity, Financial inclusion, Financial sector development, Fintech, Fintech credit, Fintech lending, Global, Lending development, Lending to GDP, Marketplace lending, Middle East and Central Asia, Peer-to-peer lending, Western Hemisphere, WP

Publication Details

Pages:

30
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2020/150
Stock No:

WPIEA2020150
ISBN:

9781513552477
ISSN:

1018-5941

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