Journal of Credit Risk
ISSN:
1744-6619 (print)
1755-9723 (online)
Editor-in-chief: Linda Allen and Jens Hilscher
Need to know
- We find a sharp increase in the total number of fintech loans between 2008 and 2023, particularly after 2014.
- Increased fintech lending is associated with decreased bankruptcy rates across counties in California.
- We also find that the unsecured loan ratio does not have a direct influence on bankruptcy rates.
Abstract
This study examines the impact of fintech lending on small business bankruptcies at the county level in California from 2008 to 2023. Using Uniform Commercial Code (UCC) filings and California and Federal Judicial Center (FJC) bankruptcy records, we find that increased fintech lending is associated with decreased bankruptcy rates across counties. This suggests that fintech lenders play a crucial role in supporting small businesses by maintaining credit access, even during economic downturns, thereby helping to mitigate the impact of reduced bank lending.
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