Thesis
FinTech versus traditional bank lending to small businesses
- Creator
- Rights statement
- Awarding institution
- University of Strathclyde
- Date of award
- 2023
- Thesis identifier
- T16595
- Person Identifier (Local)
- 201888835
- Qualification Level
- Qualification Name
- Department, School or Faculty
- Abstract
- In this thesis, I investigate experimentally the influence of alternative financial technology (FinTech) lending on small businesses financing. This is accomplished in the setting of the mediation process and the way alternative lenders outperform traditional banks. In this way, I contribute to the growing body of knowledge on FinTech. After a detailed literature review, the thesis focuses on how post-crisis regulations affect traditional banking mediation through the aforementioned alternative lenders in order to arrive at its findings. To address and compare concerns connected to alternative financial technology (FinTech) peer-to-peer (P2P) lending with traditional lending, two original research questions have been developed and are given in the empirical chapters. In the first empirical chapter, I answer the question, "after the Dodd-Frank Act, to what extent do small business loans given by alternative (P2P FinTech) lenders increase in the district where banks are affected by this legislation and where competition is low? " In the second empirical chapter, I answer the question, "after the US Liquidity Coverage Ratio (LCR), to what extent do small business loans given by alternative (P2P FinTech) lenders increase in the district where banks are affected by this legislation and where competition is low?" I use a difference-in-difference (DiD) methodology in both empirical chapters with robustness tests. This is quasi-experimental method that compares the changes in lending outcomes over time between the treatment group and the control group based firstly on a regulatory and secondly on a liquidity shock. One of the study's most important conclusions is that, despite the Dodd-Frank Act's restrictions on lending to small businesses, innovative new FinTech lending models benefited from a regulatory advantage, and P2P lender took advantage of this. On the other hand, although FinTech lenders that are exempt from financial regulation, comparable to the Dodd-Frank Act, have advantages over incumbents in U.S. liquidity regulation, no notable FinTech activity was detected in small business loans following U.S. LCR regulation. The important implication of my study's findings is that more regulatory scrutiny of banks and higher capital requirements may drive regulated institutions to reduce lending to small businesses, allowing FinTech lenders to expand their market share.
- Advisor / supervisor
- Broby, Daniel
- Thapa, Chandra
- Resource Type
- DOI
关系
项目
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PDF of thesis T16595 | 2023-06-06 | 公开 | 下载 |