Work

Social capital and FinTech lending: international evidence

Year: 2025

Type: article

Abstract: FinTech credit has grown significantly in recent years and can have important economic and financial outcomes. FinTech can expand financial inclusion to underserved populations, it provides important cost efficiencies and gains regarding access to capital and risk management. In addition to the direct effect, there are three critical channels through which social capital significantly influences FinTech lending; the inequality of income, the prevalence of digital technology, and the quality of institutions. This paper examines the relationship between social capital and FinTech lending for a panel of 56 countries for 2013-19, focusing on these important channels. We find that that greater social capital results in higher levels of FinTech lending. These results are robust to different model specifications, after correcting for possible endogeneity issues, and over different indicators of social capital. This effect is more pronounced for countries with better institutions, higher internet penetration, and lower income inequality – highlighting the need for authorities to consider these impacts when formulating policy.

Source: Journal of International Financial Markets Institutions and Money

DOI: 10.1016/j.intfin.2025.102236

Authors: Tony Cavoli, Isma Khan, G.M. Wali Ullah

Institutions: University of South Australia, Flinders University

Language: English

Topic: FinTech, Crowdfunding, Digital Finance

Subfield: Management Information Systems

Field: Business, Management and Accounting

Domain: Social Sciences

SDGs: Reduced inequalities, Decent work and economic growth

Open Access status: hybrid

Estimated APC paid: $2,930