Lender Automation and Racial Disparities in Credit Access (NBER Working Paper 29364)
Summary
An NBER Working Paper 29364, “Lender Automation and Racial Disparities in Credit Access” by Sabrina T. Howell, Theresa Kuchler, David Snitkof, Johannes Stroebel and Jun Wong, with an Issue Date of October 2021 and a Revision Date of November 2022. The abstract says process automation reduces racial disparities in credit access through enabling smaller loans, broadening banks' geographic reach and removing human biases from decision-making. It says Black-owned firms primarily obtained PPP loans from automated fintech lenders, and that after traditional banks automated their loan processing procedures, their PPP lending to Black-owned firms increased. A published version is listed in The Journal of Finance, vol 79(2), pages 1457-1512.
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“Lender Automation and Racial Disparities in Credit Access (NBER Working Paper 29364).”
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Lender Automation and Racial Disparities in Credit Access Sabrina T. Howell , Theresa Kuchler , David Snitkof , Johannes Stroebel & Jun Wong Working Paper 29364 DOI 10.3386/w29364 Issue Date October 2021 Revision Date November 2022 Process automation reduces racial disparities in credit access through enabling smaller loans, broadening banks’ geographic reach, and removing human biases from decision-making. We document these findings in the context of the Paycheck Protection Program (PPP), a setting where private lenders faced no credit risk but decided which firms to serve. Black-owned firms primarily obtained PPP loans from automated fintech lenders, especially in areas with high racial animus. After traditional banks automated their loan processing procedures, their PPP lending to Black-owned firms increased. Our findings cannot be fully explained by racial differences in loan application behaviors, pre-existing banking relationships, firm performance, or fraud rates. - Copy Citation Sabrina T. Howell, Theresa Kuchler, David Snitkof, Johannes Stroebel, and Jun Wong, "Lender Automation and Racial Disparities in Credit Access," NBER Working Paper 29364 (2021), https://doi.org/10.3386/w29364. Download Citation Non-Technical Summaries - Racial Disparities in Paycheck Protection Program Lending Author(s): Sabrina T. Howell Theresa Kuchler David Snitkof Johannes Stroebel Jun Wong Black-owned businesses were least likely to receive Paycheck Protection Program loans from small and mid-sized banks, where... Published Versions SABRINA T. HOWELL & THERESA KUCHLER & DAVID SNITKOF & JOHANNES STROEBEL & JUN WONG, 2024. " Lender Automation and Racial Disparities in Credit Access, " The Journal of Finance, vol 79(2), pages 1457-1512. Related Topics Financial Economics Financial Institutions Behavioral Finance Labor Economics Demography and Aging COVID-19 Programs Corporate Finance Public Economics Productivity, Innovation, and Entrepreneurship Working Groups Entrepreneurship Race and Stratification in the Economy Conferences Innovative Data in Household Finance: Opportunities and Challenges, Fall 2021 Mentioned in the News The Paycheck Protection Program Was Fintech's 'Moment to Shine.' The Biden... November 10, 2021 Source: Morning Consult Read the research here . Or a non-technical summary here . More from the NBER In addition to working papers , the NBER disseminates affiliates’ latest findings through a range of free periodicals — the NBER Reporter , the NBER Digest , the Bulletin on Health , and the Bulletin on Entrepreneurship — as well as online conference reports , video lectures , and interviews . - Feldstein Lecture N. Gregory Mankiw, Robert M. Beren Professor of Economics at Harvard University, presented the 2025 Martin Feldstein... - Methods Lectures - Presenters: Raj Chetty & Kosuke Imai SlidesBackground materials on mediationImai, Kosuke, Dustin Tingley, and Teppei Yamamoto. (2013). “Experimental Designs... - Panel Discussion Supported by the Alfred P. Sloan Foundation grant #G-2023-19633, the Lynde and Harry Bradley Foundation grant #20251294...
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