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Fintech Lending and Sales Manipulation

Rishabh, Kumar and Schäublin, Jorma. (2021) Fintech Lending and Sales Manipulation. WWZ Working Paper, 2021 (02). Basel.

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Official URL: https://edoc.unibas.ch/81018/

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Abstract

Fintech payment companies acting as lenders possess a potential solution to weak debt enforcement. Their location in the payment chain yields them a senior position in the revenue stream of the borrowing merchant, as the payment company can deduct part of the merchant's sales it processes to amortize the loan. Our analysis of the transactions processed through a fintech company offering such sales-linked loans suggests that some borrowers discontinuously reduce sales processed through the company immediately after the loan disbursal to strategically default. We find that competition from other lenders and cash limits the effectiveness of this enforcement technology.
Faculties and Departments:06 Faculty of Business and Economics > Departement Wirtschaftswissenschaften > Professuren Wirtschaftswissenschaften > Finanzmärkte (Lengwiler)
12 Special Collections > WWZ Publications > WWZ Discussion Papers and Working Papers
UniBasel Contributors:Rishabh, Kumar and Schäublin, Jorma Juhani
Item Type:Working Paper
Publisher:WWZ
Number of Pages:72
Note:Publication type according to Uni Basel Research Database: Discussion paper / Internet publication
Language:English
Identification Number:
  • handle: RePEc:bsl:wpaper:2021/02
edoc DOI:
Last Modified:21 Jan 2021 15:24
Deposited On:21 Jan 2021 15:24

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