Determinants of FinTech Credit Expansion

Abstract

The objective of this study is to identify key determinants of FinTech credit

expansion at the country level. Considering the data limitation on FinTech credit

markets around the world, this study conducted in-depth exploratory research as

well as empirical analyses. In a sample of 13 countries, OLS regression results

confirm that there are four significant determinants. While the population sizes

and the proportions of the younger cohorts are positive determinants, the levels

of financial inclusion and administrative costs of business start-up procedures

adversely affect FinTech credit expansion. Nonetheless, the regression results

generally do not support a negative association between the levels of bank net

interest margin (NIM) and FinTech credit expansion, indicating that the

retrenchment of incumbent banks from certain market segments does not lower

market entry barriers for FinTech credit platforms.