Bridging the gap? A theoretical analysis of the net effect of FinTech entry on access to credit.

FinTech lenders offer an opportunity to enhance credit access but may also disrupt traditional banking. This study proposes a theoretical framework for analyzing the net impact of FinTech's entry on access to credit in credit markets dominated by conventional banks. When a FinTech lender enters the market, competition intensifies, which reduces the bank's gain in serving certain customer segments. While FinTech lending can help serve some unattended niches, it may cause the bank to abandon others, leading to an ambiguous or even negative impact on access to credit. • FinTech are Lenders who make extensive use of the latest technology. • FinTech can reach more small businesses due to their alternative technology. • FinTech may stop banks from reaching clients due to higher market competition. • FinTech's entry does not guarantee increased access to credit for small businesses. • FinTech's entry can result even in the reduction of credit for small businesses. [ABSTRACT FROM AUTHOR]