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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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    4. Guo, Xiaohong & Tu, Yongqian, 2023. "How digital finance affects carbon intensity–The moderating role of financial supervision," Finance Research Letters, Elsevier, vol. 55(PA).
    5. 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.
    6. Qiaohua Lin & Xinyi Dai & Qiuwang Cheng & Wenhe Lin, 2022. "Can Digital Inclusive Finance Promote Food Security? Evidence from China," Sustainability, MDPI, vol. 14(20), pages 1-18, October.
    7. Qianqian Li & Qilin Liu, 2023. "Impact of Digital Financial Inclusion on Residents’ Income and Income Structure," Sustainability, MDPI, vol. 15(3), pages 1-20, January.

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