Did FinTech Lenders Facilitate PPP Fraud?

In the $793 billion Paycheck Protection Program (PPP), we examine metrics related to potential misreporting including non-registered businesses, multiple businesses at residential addresses, abnormally high implied compensation per employee, and large inconsistencies with jobs reported in another government program. These measures consistently concentrate in certain FinTech lenders and are cross-verified by seven additional measures. FinTech market share increased significantly over time, and suspicious lending by FinTechs in 2021 is four times the level at the start of the program. Suspicious loans are being overwhelmingly forgiven at similar rates to other loans.

Keywords: FinTech, Paycheck Protection Program (PPP), Misreporting, Fraud

JEL Classification: G21, G23, G28, H12

Suggested Citation: Suggested Citation

Griffin, John M. and Kruger, Samuel and Mahajan, Prateek, Did FinTech Lenders Facilitate PPP Fraud? (August 15, 2022). Journal of Finance, Forthcoming, Available at SSRN: https://ssrn.com/abstract=3906395 or http://dx.doi.org/10.2139/ssrn.3906395