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Does digital finance lessen credit rationing?—Evidence from Chinese farmers

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  • Xu, Yueli
  • Peng, Zhan
  • Sun, Zhaojun
  • Zhan, Huanqi
  • Li, Shuai

Abstract

This study examines whether digital finance (DF) makes a marginal contribution to the relaxation of farmers’ investment credit rationing compared with traditional rural financial institutions, using data from the recent rapid development of DF in China. Results show that DF plays an independent role in relaxing farmers’ credit rationing, indicating that it has a special function in the production and acquisition of the rural credit market. However, further analysis shows that rich farmers still receive more benefits from the development of DF than others. In addition, the impact of DF in the rural credit market is multidimensional, and diverse dimensions have different effects on the relaxation of farmers’ credit rationing. Instead of weakening credit rationing, the convenience of payment and financial management can strengthen credit rationing because of the “conduit effect” of DF in transferring rural savings to cities.

Suggested Citation

  • Xu, Yueli & Peng, Zhan & Sun, Zhaojun & Zhan, Huanqi & Li, Shuai, 2022. "Does digital finance lessen credit rationing?—Evidence from Chinese farmers," Research in International Business and Finance, Elsevier, vol. 62(C).
    • Handle: RePEc:eee:riibaf:v:62:y:2022:i:c:s0275531922001003
    DOI: 10.1016/j.ribaf.2022.101712
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    10. Chen, Xi & Wang, Qinggang & Wang, Shuai, 2025. "Enterprise digital transformation and bank credit loans—Empirical evidence from listed companies in China," Pacific-Basin Finance Journal, Elsevier, vol. 90(C).
    11. Zhou, Zixun & Zhou, Xinyu & Zhong, Hao & Zhang, Xuezhi, 2025. "Bridging social responsibility and grassroots finance: Evaluating the impact of firms’ targeted pairing assistance on county digital financial inclusion," Research in International Business and Finance, Elsevier, vol. 76(C).
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    15. Weifeng Deng & Yaobin Liu & Shuoshuo Li, 2025. "Enhancing the Conversion Efficiency of Ecological Product Value Through Digital Finance: Measurement and Mechanism Analysis," Land, MDPI, vol. 14(10), pages 1-23, October.
    16. Zhan, Yunqiu & Gao, Dongfei & Feng, Muzi & Yan, Shen, 2025. "Digital finance, non-agricultural employment, and the income-increasing effect on rural households," International Review of Financial Analysis, Elsevier, vol. 98(C).
    17. de Moraes, Claudio Oliveira & Roquete, Raphael Moses & Gawryszewski, Gustavo, 2023. "Who needs cash? Digital finance and income inequality," The Quarterly Review of Economics and Finance, Elsevier, vol. 91(C), pages 84-93.
    18. Zheng, Sufang & Huang, Siming & Deng, Xu, 2025. "Digital inclusive finance and local government debt: Examining the mechanism of impact on high-quality rural development from a macroeconomic perspective," International Review of Financial Analysis, Elsevier, vol. 102(C).
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    21. Phan, Chung & Filomeni, Stefano & Kok, Seng Kiong, 2024. "The impact of technology on access to credit: A review of loan approval and terms in rural Vietnam and Thailand," Research in International Business and Finance, Elsevier, vol. 72(PA).
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