Unveiling the adverse selection problem in China's digital lending market: Evidence from CHFS

IF 7.5 1区经济学 Q1 BUSINESS, FINANCE

International Review of Financial Analysis Pub Date : 2024-11-01 DOI:10.1016/j.irfa.2024.103631

Zhihao Zhan , Anqi Zhang , Mingxin Zhang , Mingxin Zhang

引用次数: 0

Abstract

Using data from the China Household Finance Survey (CHFS) 2019, we reveals a substantial adverse selection issue within China's Internet Credit Loan (ICL) market. Empirical evidence indicates that households with higher Debt-to-Income Ratios (DIR) are more inclined to apply for Internet Credit Loans (ICLs), with an average DIR of 76.9 %, constituting 20 % of ICL applications. While Internet Credit Loans (ICLs) provide alternative financing options, their high fixed interest rates undermine the potential cost advantages associated with digital technology. Adverse selection is especially pronounced in the case of operational loans. Our findings underscore the urgency for regulatory intervention to address these issues effectively.

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揭示中国数字借贷市场的逆向选择问题：来自CHFS的证据

利用 2019 年中国家庭金融调查（CHFS）的数据，我们揭示了中国互联网信用贷款（ICL）市场中存在的大量逆向选择问题。经验证据表明，负债收入比（DIR）较高的家庭更倾向于申请互联网信用贷款（ICL），平均负债收入比为 76.9%，占互联网信用贷款申请的 20%。虽然互联网信用贷款（ICLs）提供了另一种融资选择，但其高额的固定利率削弱了与数字技术相关的潜在成本优势。逆向选择在经营性贷款中尤为明显。我们的调查结果表明，亟需进行监管干预，以有效解决这些问题。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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来源期刊

International Review of Financial Analysis BUSINESS, FINANCE-

CiteScore

10.30

自引率

9.80%

发文量

366

期刊介绍： The International Review of Financial Analysis (IRFA) is an impartial refereed journal designed to serve as a platform for high-quality financial research. It welcomes a diverse range of financial research topics and maintains an unbiased selection process. While not limited to U.S.-centric subjects, IRFA, as its title suggests, is open to valuable research contributions from around the world.