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How do banking fintech services affect SME debt?

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  • Fasano, Francesco
  • Cappa, Francesco
Abstract
Fintech technologies have become increasingly important in the banking industry, as they allow alternative effective means to interact with clients and collect hard information, i.e. codifiable data, to make better lending decisions. However, the advent of technology contrasts with the traditional bank-firm relationship based on human interactions and soft information. This study examines whether fintech favors or hampers the amount of debt finance issued by SMEs. Our findings reveal that the use of internet banking reduces SME debt, suggesting that credit decisions based on hard information reduce the likelihood of SMEs using bank debt. A key implication of our findings is that banks and entrepreneurs should reinforce their personal relationships.

Suggested Citation

  • Fasano, Francesco & Cappa, Francesco, 2022. "How do banking fintech services affect SME debt?," Journal of Economics and Business, Elsevier, vol. 121(C).
    • Handle: RePEc:eee:jebusi:v:121:y:2022:i:c:s0148619522000261
    DOI: 10.1016/j.jeconbus.2022.106070
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    3. Viviana D'Angelo & Francesco Cappa & Enzo Peruffo, 2023. "Walking the tightrope: Circular economy breadth and firm economic performance," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 30(4), pages 1869-1882, July.
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    6. Maurizio La Rocca & Francesco Fasano & Tiziana La Rocca & Neha Neha, 2024. "Women in CEO duality and firm performance in Europe," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 28(1), pages 177-214, March.
    7. Chen, Wen & Wu, Weili & Zhang, Tonghui, 2023. "Fintech development, firm digitalization, and bank loan pricing," Journal of Behavioral and Experimental Finance, Elsevier, vol. 39(C).
    8. Fasano, Francesco & Rocca, Maurizio La & Cariola, Alfio & Passarelli, Mariacarmela, 2023. "Banking relationship and research spin-offs’ life cycle: The Italian experience," Research in International Business and Finance, Elsevier, vol. 65(C).
    9. Francesco Fasano & Maurizio La rocca, 2023. "Firm-specific determinants of internet services adoption," Economics Bulletin, AccessEcon, vol. 43(2), pages 1202-1207.
    10. Zhou, Bo & Wang, Qunwei, 2024. "FinTech matters in sustainable finance: Does it redistribute the supply of financial services?," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 91(C).

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