Exploring the determinants of Fintech Credit: A comprehensive analysis*

In recent years, FinTech credit has witnessed significant growth in the market. While previous studies have explored various factors that drive FinTech credit, a comprehensive evaluation of the determinants from the supply/demand side and risk perspective has been lacking. Thus, we examined the determinants of FinTech credit by analyzing a large collection of economic variables from 41 countries between 2013 and 2020. For this purpose, the dimension reduction technique was adopted to abstract the key determinants. The results are as follows. (1) FinTech credit is positively correlated with economic and technological development, which is more pronounced in countries with lower inflation rates. (2) It is negatively correlated with financial risk and bank competition, which is stronger in countries with lower levels of bank credit. (3) It is complementary, rather than substitutive, to traditional bank credit. The implication of the findings is that FinTech credit plays a crucial role in addressing the issue of insufficient bank credit supply.