Digital Lending Research Articles

Building bridges and the chance to do better tomorrow: global resource sharing moving forward

Purpose The purpose of this paper is to disseminate the American Library Association (ALA) Reference and User Services Association (RUSA) Sharing and Transforming Access to Resources Section (STARS) international interlibrary loan (ILL) Committee 2023 international ILL survey results and findings. The survey evaluates current international resource sharing operations, identifies trends and challenges and recommends promoting services within the global library community. Design/methodology/approach The survey used the Qualtrics platform and included multiple-choice and open-ended questions. The survey questionnaire was built upon the 2019 and 2015 instruments to facilitate longitudinal data analysis and comparison. The committee added new questions related to the COVID-19 pandemic and controlled digital lending (CDL). The survey was distributed to libraries worldwide via multiple channels, in all seven official International Federation of Library Associations and Institutions (IFLA) languages. Qualitative comparative analysis methodology was applied to analyze the survey results. Findings The survey results reveal the challenges and opportunities to engage in international ILL activities. The importance of sharing electronic resource content continues to grow as library collections shift from print to electronic resources. Originality/value The 2023 international ILL survey is the first offered in all seven official IFLA languages and included questions on the topics of COVID-19 and CDL. It contributes to the literature by providing global trends and perspectives on current international resource sharing practices, challenges and opportunities facing the global resource sharing community and recommendations on building bridges to do better in the future.

Bridging India's Financial Divide: The Power of Artificial Intelligence and Machine Learning

Artificial Intelligence (AI) and Machine Learning (ML) are transforming India's financial sector, enhancing decision-making, risk assessment, and personalized services. They extend financial services to underserved populations through scalable solutions like digital lending and mobile banking, fostering financial inclusion and bridging urban-rural gaps. Notable progress has been made through initiatives like the Pradhan Mantri Jan Dhan Yojana (PMJDY), which opened over 53 crore accounts by August 2024. However, challenges such as low literacy rates, inadequate digital infrastructure, and a large informal economy persist. AI and ML address financial inclusion gaps by automating KYC processes and improving onboarding through facial recognition and identity verification. Initiatives like Aadhaar provide digital identities, enhancing access to banking. ML algorithms expand financial access by analyzing alternative data for credit scoring. Companies like Lenddo and Tala leverage ML for loans, and AI revolutionizes fraud detection by analyzing transaction data in real-time. AI integration with digital payment platforms like UPI has transformed India's financial ecosystem, processing over 15 billion transactions monthly by August 2024 (NPCI). AI-driven micro-lending platforms like Capital Float and Aye Finance address a $380 billion credit gap (BCG) by assessing creditworthiness using alternative data. AI-driven chatbots and financial products tailored to rural customers improve financial literacy and services. In agricultural finance, AI introduces lending models and enhances crop insurance through satellite data and weather patterns. Programs like PMFBY and companies like Skymet use AI for faster claims processing. AI-driven solutions in RegTech simplify compliance and improve fraud detection. Fintech collaborations and government initiatives like IndiaStack, Aadhaar, and DigiLocker promote financial inclusion. Overcoming barriers like infrastructure challenges, data privacy concerns, and AI bias is essential for leveraging AI to provide equitable financial services in India. The constructive interaction between AI and blockchain further enhances financial inclusion, creating a secure, transparent ecosystem that drives economic growth and social well-being.

From innovation to inclusion: The dynamic influence of fintech on financial accessibility and future scopes in India

Purpose – The purpose of this paper is analyze the effects of Fintech and its various sub-sets on Financial Inclusion. Additionally, the authors have analyzed the presence of Fintech in India, its emergence, and its future scope. Design/methodology/approach – As a literature review, no specific methodology is required. Findings – Research has shown core sub-sectors of Fintech like Reg-tech, Insur-Tech, Online Banking, and Digital Lending to be sectors that contribute the most to financial inclusion from Fintech if further investment is made these sectors have promising potential Research limitations/implications – The review would prove to be a dire catalyst in the research of present Fintech situations, aiding professionals in finding key sectors where further attention and investment in financial inclusion can prove to provide positive outcomes. Practical implications – The study highlights areas of Fintech that have the most positive impact on financial inclusion providing a clear path to investors and government officials on which areas to focus on. Social implications – As a literature review, there are only indirect social implications in the sense that the studies reviewed could be used to impact people’s lives. Originality/value – As a literature review, originality is not an applicable criterion, however, the study adds value for the reader by highlighting gaps in the current body of knowledge and bringing together various studies in one location.

Frontier technology readiness and mineral resources utilization effect on load capacity factor: Mediating function of fintech indicators

The consistent exploitation of mineral resources is leading to an imbalance between the ecological footprint and biodiversity, thereby affecting the load capacity factor (LCF). In this digital era, financial technologies (fintech) and the readiness for frontier technologies have the potential to impact LCF significantly. This study evaluates the influence of mineral resources and frontier technology readiness indicators (FTRI) on LCF in thirty-two developed countries from 2014 to 2020. Additionally, it explores the mediating role of fintech instruments, specifically digital capital raising and digital lending, on FTRI. Through structural equation modeling, the findings indicate that fintech indicators have a direct and positive impact on LCF. Surprisingly, mineral resources also show a significantly positive influence on LCF. In contrast, FTRI has an insignificant direct influence on LCF, but it indirectly enhances LCF by improving digital capital and digital lending. In terms of indirect effects, the combined impact of fintech indicators is stronger than their individual effects. These results provide valuable insights for policy recommendations.

Is Schumpeter right? Fintech and economic growth

ABSTRACT The rise of fintech is revolutionizing the financial landscape, with products and companies advancing innovative technologies to improve and automate financial services. In this paper, I use a novel dataset to investigate the relationship between fintech and economic growth in a panel of 198 countries over the period 2012–2020. This approach – utilizing direct measures of fintech – provides interesting empirical insights. First, the impact magnitude and statistical significance of fintech on real GDP per capita growth depend on the type of instrument (digital lending vs. digital capital raising). While digital lending has a statistically significant positive effect on economic growth, digital capital raising has a large but insignificant effect. Second, the overall impact of fintech including all instruments is positive and statistically significant because of the overwhelming share of digital lending in total. Finally, while the positive relationship between fintech and growth is stronger in magnitude in advanced economies, the statistical significance of this effect is higher in developing countries. Taken as a whole, these results confirm Schumpeter’s prediction that financial innovation can promote growth, but not every type of fintech becomes an accelerator.

Christian Ethical Response to The Challenges of Digital Financial Borrowing in Nigeria

Digital financial borrowing is the money borrowed online through digital mobile applications, platforms or phones that are offered by financial lenders using the Internet. Due to the advancement in financial technology, banking and financial services and operations have been digitalized. The emergence of digital finance has rebranded banking and financial borrowing access and opportunities. People can now borrow money online, digitally and seamlessly. This development is applaudable because it eases traditional banking operations burdens and removes bottlenecks in borrowing and lending to finance business and personal needs. However, the attendant experiences from digital financial borrowing are worrisome and pose challenges to human well-being in developing economies, especially among Christians in Nigeria. Some of the experiences of digital financial borrowers are poor loan repayment, which may be due to high interest, breach of personal data policy and social shaming of defaulted borrowers by lending companies’ employees. The unvirtuous motives and characters of some borrowers, professionally unethical attitudes and loan recovery strategies are responsible for these challenges. This paper gives an overview of digital financial borrowing in Nigeria and discusses digital financial borrowing, which is characterized with features such as instant, automation, remote, consumer loans and short maturity. The paper argues that digital financial borrowing has assisted financial inclusion and contributed to Nigeria’s digital economy, it has however negatively impacted on borrowers’ personal, emotional, mental, marital, business, spiritual and moral well-being due to poor repayment or inability to repay, high interest, and social shaming of customers by digital loan officers. The paper concludes that Christians should act virtuously and ethically according to biblical instructions when dealing in financial borrowing, wisdom, honesty, godliness, discretion, patience and mutual respect are among Christian virtues to display in financial borrowing decisions, actions and relationships. It recommends that churches and church leaders should encourage financial education and literacy that enhance credit understanding and boost Christians’ financial wellness. It also recommends that Chartered Institute of Bankers of Nigeria, with other financial regulatory bodies in Nigeria should regulate the operations of lending companies and enforce acceptable professional work ethics and attitudes of digital lending companies’ employees to enhance friendly relationships with customers.

Achieving the SDGs: Challenges and Solutions for MSMEs Against Predatory Digital Loans

Predatory digital lending poses significant challenges to the sustainability of micro, small, and medium enterprises (MSMEs) in Indonesia. This study explores the reasons, consequences, and impacts of predatory digital loans on MSMEs, focusing on how these practices hinder economic well-being and growth. The research employs a qualitative method, utilizing content analysis from secondary sources, including academic journals, reports, and government documents. Data were collected through an in-depth review of literature and case studies of MSMEs affected by predatory loans. The findings reveal that many MSMEs, particularly in rural areas, lack sufficient financial literacy, which increases their vulnerability to predatory lending. Legal frameworks, such as POJK 35/POJK.05/2018, are inadequate in regulating debt collection ethics, allowing illegal practices to flourish. Additionally, gender disparities affect loan approval rates, with female borrowers facing higher risks of harassment. The study concludes that improving financial literacy, strengthening government regulations, and fostering collaboration between MSMEs, government bodies, and financial institutions are essential for protecting MSMEs from predatory digital lending. By doing so, MSMEs can achieve sustainable growth and contribute more effectively to Indonesia's economic development and the achievement of the Sustainable Development Goals (SDGs).

Unveiling the adverse selection problem in China's digital lending market: Evidence from CHFS

Using data from the China Household Finance Survey (CHFS) 2019, we reveals a substantial adverse selection issue within China's Internet Credit Loan (ICL) market. Empirical evidence indicates that households with higher Debt-to-Income Ratios (DIR) are more inclined to apply for Internet Credit Loans (ICLs), with an average DIR of 76.9 %, constituting 20 % of ICL applications. While Internet Credit Loans (ICLs) provide alternative financing options, their high fixed interest rates undermine the potential cost advantages associated with digital technology. Adverse selection is especially pronounced in the case of operational loans. Our findings underscore the urgency for regulatory intervention to address these issues effectively.

Providing Security for Flash Loan System Using Cryptocurrency Wallets Supported by XSalsa20 in a Blockchain Environment

The days of long lines at banks and piles of paperwork are long gone. The lending landscape has been completely transformed by digital loans, which provide a quick, easy, and frequently paperless transactions. A payee can apply for a digital loan anytime, anywhere. The entire lending procedure is accessible and efficient, but the availability of data on the Internet provides many risks and threats, where there are certain difficulties in the world of digital lending and data security, and privacy are major concerns. It is important to address the possibility of predatory lending practices that target weaker payees, especially with flash loans, which are considered a critical type of digital loan, as they add additional pressure to banks in terms of security because they return to the same block of the blockchain, and the possibility of tampering with them is considered great. Therefore, we have developed a security protocol based on the principle of digital cryptocurrency wallets: these digital wallets are protected by our use of the Xsalsa20 algorithm. It has high specifications and is enhanced with the usage of the Crow search algorithm, which guarantees fast and efficient search results. After the analysis of the proposed system in the Tamarin Prover tool, we obtained proof of a lot of security properties like data authenticity, perfect forward secrecy, and many others, which constitute the matter that gives our system the power of security. Also, we obtained 0.6667 ms. as the rate of processing speed, 2990 ms. as the time required by the proposed system to repay loans after the conditions are met, and, finally, our proposed system has the power to present a flexible property by creating 29,700 loans every 3 s; by this, we obtained a system that is secure, authentic, fast, and flexible.

SMEs as catalysts for economic development: Navigating challenges and seizing opportunities in emerging markets

Small and medium-sized enterprises (SMEs) play a critical role in the economic development of emerging markets, acting as catalysts for innovation, job creation, and poverty reduction. They are often the backbone of these economies, driving growth through their adaptability and entrepreneurial spirit. However, SMEs also face significant challenges that must be navigated to fully capitalize on their potential. One of the primary challenges SMEs encounter in emerging markets is limited access to finance. Traditional banks often view SMEs as high-risk investments due to their smaller size and lack of collateral. This financing gap can stifle their growth and innovation capabilities. To address this, microfinance institutions and digital lending platforms have emerged as crucial alternatives, providing SMEs with much-needed capital. According to the International Finance Corporation (IFC), improving access to finance for SMEs could increase GDP growth rates significantly in emerging economies. Another critical challenge is the lack of infrastructure, which can impede business operations and logistics. In many emerging markets, inadequate transportation networks, unreliable power supply, and limited internet connectivity hinder SME productivity and market reach. Governments and international organizations are increasingly investing in infrastructure development to create a more conducive environment for SMEs. The World Bank, for instance, has various programs aimed at enhancing infrastructure in emerging markets, thereby facilitating better business operations for SMEs. In terms of opportunities, the digital revolution offers vast potential for SMEs. Digital tools and platforms enable SMEs to reach broader markets, streamline operations, and improve customer engagement. E-commerce, in particular, allows SMEs to overcome geographical limitations and tap into global markets. Additionally, leveraging social media for marketing can significantly enhance brand visibility and customer acquisition. Furthermore, emerging markets often present a youthful and growing consumer base, eager for new products and services. SMEs can seize this opportunity by tailoring their offerings to meet local preferences and demands. This consumer-centric approach can lead to increased loyalty and market share. In conclusion, while SMEs in emerging markets face considerable challenges, the opportunities for growth and impact are immense. By improving access to finance, investing in infrastructure, and embracing digital tools, SMEs can drive substantial economic development. Policymakers, financial institutions, and international organizations must continue to support these enterprises to unlock their full potential and foster sustainable economic growth.

Law libraries, copyright and digital lending

AbstractThe article titled “Law Libraries, Copyright and Digital Lending” aims to bring to the fore copyright issues related with digital lending by law libraries and is a comparative study of the copyright law of India and the United States. Accordingly, this piece will analyze the situation in two jurisdictions—India and the United States to understand the facilitation of digital lending by law libraries, particularly during the COVID‐19 pandemic. It will look at some key concepts such as publication, distribution, reproduction, controlled digital lending, fair use, fair dealing, public interest, exhaustion, and copyright infringement. To understand the practice of digital lending by law libraries in India and controlled digital lending in the United States the author interviewed a few librarians from both countries and learnt about the challenges faced by librarians to facilitate digital lending. The author also learnt that while librarians in the United States practice controlled digital lending, librarians in India do not; they practice only digital lending. Testimonies of librarians and analysis of the present law and precedents in India and the United States led the author to understand that there is no concrete law on digital lending by law libraries at present in the two jurisdictions. Accordingly, this article discusses the utility and necessity of digital lending by law libraries in the present times, as also that of controlled digital lending.

The Machine Learning Methods For Micro-Credit Scoring: The Case Of Micro-Financing In Mongolia

As a result of growing digital technologies in the financial sector, the traditional slow lending process is being replaced by fast and easy digital lending systems that can make decisions in real time. Both lenders and borrowers have experienced the benefits of digital lending, the activities of microfinance institutions have expanded rapidly and the volume of digital microloans has increased significantly worldwide, including Mongolia. At the same time with the growing volume of digital microloans in Mongolia, the rationality of credit risk management has been becoming more critical. Credit quality is the most important factor in optimal credit risk management. It depends on determining the customer's creditworthiness and making accurate credit decisions. This research focuses on a credit scoring system to improve the digital loan evaluation system of the Mongolian microfinance institute. This study aims to contribute to the development of possible credit scoring systems for Mongolian microfinance institutions by comparing several machine-learning approaches based on loan datasets of a non-banking microfinance institute in Mongolia. The result shows the ensemble methods Random Forest and XGBoost Tree's accuracies are higher than other machine learning models for the microloan borrowers' repayment status prediction.

Legal Implications of Personal Data Misuse in Emergency Contact Information for Online Loan Services

This study investigates the legal risks associated with being an emergency contact or the absence of emergency contact in online loans. Utilizing a Normative Juridical approach, the research evaluates the effectiveness of legal policies in minimizing these risks. Findings reveal that serving as an emergency contact may lead to inconvenience due to frequent communication from debt collectors, while the absence of emergency contacts poses challenges for lenders in contacting borrowers, resulting in potential financial losses. These results underscore the importance of implementing efficient legal measures to protect both borrowers and lenders in online lending transactions. Highlights : Importance of Legal Policies: Evaluating the effectiveness of legal policies in minimizing risks associated with online loans is crucial for ensuring the protection of both borrowers and lenders. Role of Emergency Contacts: Investigating the impact of emergency contacts on mitigating legal risks sheds light on the practical aspects of borrower-creditor communication in online lending transactions. Financial Implications: Understanding the financial consequences of lacking emergency contacts in online loans underscores the need for comprehensive risk management strategies in the digital lending landscape. Keywords: Online loans, Legal risks, Emergency contacts, Normative Juridical approach, Financial implications

A Study of the Impact of Health Behavior on The Mental Health of Female College Students

Aim: Female students who constitute a large portion of student population in China suffer due to femininity issues, which often act as barriers in their work performance and also affect adversely their mental health. The objective of this study was to provide significant knowledge and practical recommendations for improving the mental health of students. Methods: This research tested the impact of the health behavior of Chinese female college students on their mental health. Furthermore, this study also tested the interaction of three mediators in the relationship between health behavior and the mental health of Chinese college female students. The population of this study comprised female students from Chinese colleges. A sample of 218 students was identified to fill up a survey-based questionnaire, printed and distributed to the participants. The Statistical Package for Social Sciences (SPSS) version 21 was employed in the research to determine the empirical evidence for the research model and hypotheses testing. Results: The research found that the impact of health behavior on female college students is significant for their mental health. The study also found the interaction impact of digital lending, psychiatric consultancy, and emotional well-being is also accepted on the relationship between health behavior at dental health of Chinese female students. Conclusion: This study contributed findings in the body of knowledge, which were less entertained by the scholars and inconsistency in literature was found. The study also has practical recommendations to improve the mental health of Chinese female college students.

An Outlook on Role of Open Credit Enhancement Network in India’s Digital Lending: MSMEs

The micro, small, and medium enterprises (MSME) sector of India is a key source of generating employment and entrepreneurship there by contributing to the country’s economic and social development. Despite all these features, MSMEs struggles to access credit for financial requirement and the credit demand gap is increasing year after year. To meet such credit demand, Indian Government has launched the Open Credit Enablement Network, or OCEN, a step to move towards democratization of credit and financial inclusion. The present study throws light on the need for OCEN and the role of OCEN in digital lending ecosystem of MSMEs in India. The paper also discusses the challenges and the opportunities for OCEN in the financial inclusion status of the economic system.

Innovative Credit Scoring Methods in India by the Fintech Companies to Increase Financial Inclusivity for Digital Lending

Abstract Fintech is part of the digital revolution of India which aims towards increasing the Indian economy and financial inclusivity of the population. Fintech has done significant contributions in digital lending and will continue to do in future, one of the contributions is in the unique model created for credit scoring of minorities who do not have a credit history or not eligible to attain credit score through the traditional method. The strategic changes in the new credit scoring method on the basis of machine learning and artificial intelligence can provide more accurate results and provide reports for the isolated population who did not have access to credit earlier. - Methodology: The article has been written with in depth research on the Indian Fintech market and the current state of Indian digital lending. Begin with introduction of fintech evolution in India and what does it mean. Post which it provides in depth understanding about the state of digital lending and why is there a need of amendment in the credit scoring method which is used for digital lending. The influence of fintech in credit scoring has been explored via existing published research papers and statistics from World Bank. In the end, there has been suggestions in form of inputs from the author for how India can reach financial inclusivity. - Purpose: The purpose of the article is to curate information about how the Indian economy should use fintech for its advantage. The research paper aims towards outlining potential limitations too if the non-traditional credit scoring methods are used as a major factor in digital lending. Overall, the paper seeks to understand what was the major reason behind the lack of inclusivity in digital lending in India and how can it be overcome. - Findings: The research paper helps to understand that Fintech has done significant contributions in digital lending and will continue to do in future, one of the contributions is in the unique model created for credit scoring of minorities who do not have a credit history or not eligible to attain credit score through the traditional method. The strategic changes in the new credit scoring method on the basis of machine learning and artificial intelligence are able to provide more accurate results and provide reports for the isolated population who did not have access to credit earlier. - Value: The research paper has cited all the sources which has used for the research on the topic in MLA9. It is a 100% AI free paper and has been written entirely by the author without the intervention of any third party in it.

Effect of Digital Banking Technology on Loan Uptake in Hotels Industry in Kenya

Digital banking technology is having a profound impact on businesses and corporate borrowing behavior. Integrating digital banking technology and its impact on hotel borrowing is a critical challenge. Limited digital literacy, uneven technology adoption and inadequate regulatory support prevent hotels from reaping the benefits. This study is based on three theories: the technology acceptance model, Institutional theory and the resource-based verification theory. This study uses literature review methodology to draw analysis and conclusions. Studies suggest that these technologies have democratized access to credit, empowered previously underserved populations, and improved financial inclusion. However, alongside these benefits, criticism of the literature also reveals ongoing concerns. These include questions of digital literacy, data security and the possible exclusion of marginalized groups. Additionally, questions arise regarding the effectiveness of digital lending platforms in accurately assessing creditworthiness and managing associated risks that may impact credit quality and overall financial stability. Although digital banking technology offers opportunities to expand access to credit, it is important to address these challenges to ensure equitable and sustainable financial inclusion outcomes. The study concludes that by leveraging the potential of mobile banking, digital payment systems and online lending platforms, hotels can more effectively address financial challenges and seize opportunities for sustainable development and success in the dynamic business landscape.

The dark side of the moon? Fintech and financial stability

AbstractRapid advances in digital technology are revolutionizing the financial landscape. The rise of fintech has the potential to make financial systems more efficient and competitive and broaden financial inclusion. With greater technological complexity, however, fintech also poses potential systemic risks. In this paper, I use a novel dataset to trace the development of fintech (excluding cryptocurrencies) and empirically assess its impact on financial stability in a panel of 198 countries over the period 2012–2020. The analysis provides interesting insights into how fintech correlates with financial stability: (1) the impact magnitude and statistical significance of fintech depend on the type of instrument (digital lending vs. digital capital raising); (2) the overall effect of all fintech instruments together turns out to be negative because of the overwhelming share of digital lending in total, albeit statistically insignificant; and (3) while digital capital raising is estimated to have a positive effect on financial stability in advanced economies, its effect is negative in developing countries. Fintech is still small compared to traditional institutions, but rapidly expanding in riskier segments of the financial sector and creating new challenges for policymakers.

Fintech dividend: How would digital financial services impact income inequality across countries?

Discrimination and marginalization in the financial services provided by traditional intermediaries are often cited as one of the main causes of persistent income inequality across socioeconomic groups in many countries. Whether Fintech eliminates such prejudice and exclusion and promotes equitable income distribution is unclear. This paper examines the impact of Fintech digital financial services on income inequality. Using a two-step generalized methods-of-moments (GMM) estimator, we analyze unbalanced panel data from 65 countries spanning the years 2013–2019. Drawing on the most recent data available on the actual transaction volume of Fintech digital financial services, we generate evidence at the level of specific service segments. We find that Fintech digital lending and digital capital-raising services are significantly and negatively associated with income inequality. Furthermore, our results from mechanism analysis suggest that Fintech mainly impacts income inequality by improving the accessibility and efficiency of financial services. Overall, our findings imply that promoting Fintech is critical to improving financial inclusion and alleviating income disparity.

The role of credit reports in digital lending: a case study from Mexico

Abstract Digital credit that uses non-traditional scoring techniques has already expanded credit access to many new populations. A point of policy debate is whether digital lenders should be fully integrated into information-sharing systems, such as those offered by credit reference bureaus (CRBs). We study an example of a digital lender in Mexico adopting credit bureau scores into its screening process. Using unique administrative data, we estimate a regression discontinuity in time around the lender’s integration of credit bureau scores. We find that the acquisition of credit scores reduces defaults, with the likelihood of borrowers’ repayment increasing by 10–13 per cent.