Review of Financial Studies Vol. 39 No. 7 2026

Collateral Effects: The Role of FinTech in Small Business Lending

Paul M. Beaumont¹; Huan Tang²; Éric Vansteenberghe³

¹ McGill University · ² The Wharton School, University of Pennsylvania and CEPR , · ³ Banque de France

Abstract

This paper investigates the impact of introducing junior unsecured loans (i.e., FinTech loans) into the small business lending market. Using French administrative data, we find that firms experience a 13% increase in bank credit after receiving a FinTech loan. We use propensity score matching procedures and a shift-share instrument to account for credit demand. The credit increase only occurs when FinTech borrowers invest in new assets, and Fintech borrowers are subsequently more likely to pledge collateral to banks. This suggests that firms use FinTech loans to acquire assets that they then pledge to banks, thereby increasing total borrowing capacity.

DOI

10.1093/rfs/hhaf080

Volume

39

Issue

7

Pages

2064-2114

Language

en

Sources

openalex crossref

Cite

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