Shadow Banking in a Crisis: Evidence from FinTech During COVID-19

Journal of Financial and Quantitative Analysis, Forthcoming

58 Pages Posted: 23 Nov 2020 Last revised: 5 Oct 2021

Date Written: November 21, 2020


We analyze lending by traditional as well as FinTech lenders during COVID-19. Comparing samples of FinTech and bank loan records across the outbreak, we find that FinTech companies are more likely to expand credit access to new and financially constrained borrowers after the start of the pandemic. However, this increased credit provision may not be sustainable; the delinquency rate of FinTech loans triples after the outbreak, but there is no significant change in the delinquency of bank loans. Borrowers holding both loan types prioritize the payment of bank loans. These results shed light on the benefits provided by shadow banking in a crisis and hint at the potential fragility of such institutions when delinquency rates spike.

Keywords: COVID-19, Credit Card, FinTech, Credit Provision, Delinquency

JEL Classification: D90, G21, I18, O16

Suggested Citation

Bao, Zhengyang and Huang, Difang, Shadow Banking in a Crisis: Evidence from FinTech During COVID-19 (November 21, 2020). Journal of Financial and Quantitative Analysis, Forthcoming, Available at SSRN: or

Zhengyang Bao

Xiamen University ( email )

422 South Siming Road
Xiamen University
Xiamen, Fujian 361005


Difang Huang (Contact Author)

Monash University ( email )

900 Dandenong Road
Caulfield East
Melbourne, Victoria 3145


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