Do FinTech Mortgage Lenders Fill the Credit Gap? Evidence from Natural Disasters
Journal of Financial and Quantitative Analysis, Forthcoming
77 Pages Posted: 7 Jul 2020 Last revised: 10 Jul 2022
Date Written: June 12, 2020
After exogenous demand shocks caused by natural disasters, FinTech lenders are more responsive to increased demand for reconstruction mortgages than traditional banks and non-FinTech shadow banks. Both FinTech and traditional banks increase credit supply, but FinTech supply is more elastic without increases in risk-adjusted interest rates or delinquency rates. Comparing lending supply channels, banks respond to regulatory incentives to lend to damaged areas, whereas FinTech lenders supply more credit when traditional banks rely more on balance sheet financing and physical branch networks. Compared to traditional banks, FinTech lenders increase supply elasticity more aggressively in response to local competitive pressure.
Keywords: FinTech, Mortgage, Lending, Shadow Banks, Natural Disasters, Household Finance
JEL Classification: G20, G21, G24, G28
Suggested Citation: Suggested Citation