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Digital infrastructure development and credit constraints

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  • Lv, Xueliang
  • Xue, Yutong

Abstract

The study focuses on the impact of digital infrastructure development on household credit constraints. Digital infrastructure can reduce information asymmetry, expand the reach of financial services, and enhance credit accessibility, making it an effective tool for alleviating credit constraints. This paper empirically examines the role of digital infrastructure in mitigating household credit constraints and clarifies the underlying mechanisms. The results show that digital infrastructure alleviates household credit constraints by improving credit accessibility and reducing information asymmetry. Furthermore, it operates through two channels—income and collateral. Specifically, digital infrastructure has both income-enhancing and long-tail effects: it helps ease credit constraints by increasing household income and is particularly effective in reducing credit constraints for low-income households and those lacking adequate collateral.

Suggested Citation

  • Lv, Xueliang & Xue, Yutong, 2026. "Digital infrastructure development and credit constraints," Finance Research Letters, Elsevier, vol. 92(C).
    • Handle: RePEc:eee:finlet:v:92:y:2026:i:c:s1544612325027151
    DOI: 10.1016/j.frl.2025.109466
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