EIRC Internal Seminar – Yan Alperovych on FinTech lending under austerity


Date: Tuesday, November 8th, 2022

Time: 12:00 to 13:30

Paper by: Yan Alperovych

Discussants: Alex Groh and Daniela Schoch


On Tuesday, November 8th, 2022, we gathered to listen to Yan Alperovych, who presented his paper on the topic of “FinTech lending under austerity”.

The discussion around the paper was so engaging that we could not finish it within the seminar’s dedicated time slot!

A big thanks to Yan for sharing his work, a big thanks to the audience for engaging so much with it, and special thanks to Alex Groh and Daniela Schoch for playing an active role as discussants.


FinTech lending under austerity” by Yan Alperovych


We document public welfare spending as an important growth driver of FinTech lending. Examining the massive austerity-led cuts to local welfare spending initiated by the UK government in 2010, we show that the gradual uneven rollback of the local welfare state since then is strongly associated with a rise in demand for peer-to-peer (P2P) consumer loans among affected areas, primarily in areas facing more banking and digital exclusion. P2P loans issued in austerity-affected areas are more expensive compared to those issued in unaffected areas, consistent with the P2P platform’s risk pricing sensitivity to higher default rates in affected areas. Overall, our findings show that P2P lending, as an alternative means to household finance, can help smooth cuts in welfare transfers particularly among households in economically deprived areas.

Full paper available at: https://ssrn.com/abstract=4169831