Does Fintech credit substitute for traditional credit? Evidence from 78 countries

Using a panel of 78 countries for 2013 - 2019, I show that fintech credit platforms can act as both complements and substitutes for traditional bank credit and that banking sector characteristics are likely to play a part in shaping the relationship. Estimates suggest that in less concentrated, more liquid and more stable banking sectors, banks and fintech credit platforms tend not to compete for the same clientele and coexist as complements. On the other hand, in less stable and highly concentrated banking sectors, I find evidence that fintech may act as a direct substitute to bank credit.