FinTech Lending and Cashless Payments

UNIVERSITY OF TECHNOLOGY SYDNEY
Finance Department
Research Seminars in Finance

 

Boris Vallee

Topic: FinTech Lending and Cashless Payments

Speaker: Boris Vallee, Harvard Business School

Abstract: We provide a new perspective on the rise of FinTech lending by uncovering an informational synergy with cashless payments. Theoretically, FinTech lenders screen borrowers more efficiently when borrowers use cashless payments that produce transferable and verifiable information. In turn, because borrowers expect lenders to rely on such payment information to screen them, a strategic consideration to stand out from non-adopting borrowers pushes more borrowers to adopt cashless payments. Using novel loan application data from a leading Indian FinTech lender targeting small businesses and an instrumental variable based on the 2016 Indian Demonetization, we identify that a larger use of cashless payments predicts a higher likelihood of loan approval, a lower interest rate, and lower default. These relationships are stronger for firms of higher observable risk, and for firms of higher quality that can be only inferred from payment records. This synergy supports data sharing and open banking, and more broadly the development of an alternative banking model without a balance sheet or traditional banking relationships.

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Moderator: Kenny Phua, University of Technology Sydney

Date: Wednesday, 29th September 2021
Time: 9-10 am (Australian Eastern Standard Time)
Venue: This is on online Zoom webinar.

Seminar protocols:

  • The webinar will run for 45 minutes, followed by a 15 minute Q&A session.
  • There will be a moderator for each seminar event, who will facilitate communication and resolve any technical issues.
  • Participants can use the chat facility or raise their had to ask questions during the presentation. The moderator will then alert the speaker at the appropriate time and either ask the questions raised or unmute the participant so they can ask the question directly to the presenter.

Co-ordinator: Harry Scheule

Enquiries: Duncan Ford

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