Fintech and big tech credit: drivers of the growth of digital lending

Fintech and big tech companies are making rapid inroads into credit markets. We hand construct a global database of fintech and big tech lending volumes for 79 countries over 2013-2018. Using a panel regression analysis, we find these new forms of digital lending are larger in countries with higher GDP per capita (albeit at a declining rate), where banking sector mark-ups are higher, and where banking regulation is less stringent. We also find that these alternative forms of credit are more developed where the ease of doing business is greater, investor protection disclosure and the efficiency of the judicial system are more advanced, and where bond and equity markets are more developed. Overall, fintech and big tech credit seem to complement other forms of credit, rather than substitute for them.