Analysis of the impact of the COVID-19 lockdown on financial technology (FinTech), interest rate liberalization (IRL) and commercial banks’ risk-taking: Chinese empirical evidence

Zheng, Yingrong; Dong, Hao; Li, Na

doi:10.1080/00036846.2024.2302934

Cited by 1 publication

(1 citation statement)

References 53 publications

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“…Gupta and Verma (2022) and Soni and Mangona (2024) demonstrate that fintech heightened financial inclusion in India during the COVID-19 era. A study by Zheng et al (2024) revealed a U-shaped relationship between fintech and COVID-19. In addition, COVID-19 has caused the growth of fintech to accelerate the liberalization of interest rates, thus increasing the level of banks' price competition and risktaking.…”

Section: The Effect Of the Covid-19 Pandemic On Fintech-based Financi...mentioning

confidence: 99%

Fintech-based financial inclusion and banks' risk-taking: the role of regulation in Sub-Saharan Africa

Chinoda,

Mingiri Kapingura

2024

JEAS

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PurposeThe study examines the role of regulation in the fintech-based financial inclusion (FBFI)–risk-taking nexus in the Sub-Saharan African (SSA) region.Design/methodology/approachUsing a sample of 10 countries in SSA over the period 2014 to 2021, the study employed the fixed-effect regression model and the two-step generalized method of moments (GMM) estimator.FindingsThe results show that FBFI mitigates commercial banks risk-taking in SSA. But as FBFI progresses, the association takes the shape of an inverted U, increasing risks initially and decreasing them later on. Effective supervision and regulatory quality, in particular, are essential in moderating this relationship by offsetting the adverse consequences of FBFI in its early stages.Research limitations/implicationsFirst, while our sample is limited to banks in ten SSA countries, future studies could extend the sample size, enabling more explicit generalization of the results. Second, the FBFI–bank risk nexus can be explored further by comparing diverse forms of fintech participation, such as fintech company investment, fintech technology investment, cooperation with specific fintech service providers and cooperation with Internet giants.Practical implicationsPolicymakers, banks and fintech companies should collaborate to certify the sustainable utilization of fintech tools to ensure financial inclusion. Policymakers should craft policies that encourage effective supervision and regulatory quality of fintechs since they reduce banks' risk-taking practices, which usually have positive effect on the economy.Originality/valueThe study adds value to the debate on the role of regulation on the FBFI–risk-taking nexus, taking into account countries that are at different levels of development.

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Section: The Effect Of the Covid-19 Pandemic On Fintech-based Financi...mentioning

confidence: 99%

Fintech-based financial inclusion and banks' risk-taking: the role of regulation in Sub-Saharan Africa

Chinoda,

Mingiri Kapingura

2024

JEAS

View full text Add to dashboard Cite

show abstract

Analysis of the impact of the COVID-19 lockdown on financial technology (FinTech), interest rate liberalization (IRL) and commercial banks’ risk-taking: Chinese empirical evidence

Cited by 1 publication

References 53 publications

Fintech-based financial inclusion and banks' risk-taking: the role of regulation in Sub-Saharan Africa

Fintech-based financial inclusion and banks' risk-taking: the role of regulation in Sub-Saharan Africa

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