Alternative Credit Assessment and the Real Effects of Bank Branch Closures: Evidence from Fintech Lending and Behavioral Creditworthiness

Alternative Credit Assessment and the Real Effects of Bank Branch Closures: Evidence from Fintech Lending and Behavioral Creditworthiness | Research Square window.SnipcartSettings = { analytics: { enabled: false } }; (function() { var accessVector = localStorage.getItem('access_vector') || ''; window.dataLayer = window.dataLayer || []; if (accessVector) { window.dataLayer.push({ user: { profile: { profileInfo: { snid: accessVector } } } }); } })(); (function(w,d,s,l,i){w[l]=w[l]||[];w[l].push({'gtm.start':new Date().getTime(),event:'gtm.js'});var f=d.getElementsByTagName(s)[0],j=d.createElement(s),dl=l!='dataLayer'?'&l='+l:'';j.async=true;j.src='https://www.googletagmanager.com/gtm.js?id='+i+dl;f.parentNode.insertBefore(j,f);})(window,document,'script','dataLayer','GTM-K279D39R'); Browse Preprints In Review Journals COVID-19 Preprints AJE Video Bytes Research Tools Research Promotion AJE Professional Editing AJE Rubriq About Preprint Platform In Review Editorial Policies Our Team Advisory Board Help Center Sign In Submit a Preprint Cite Share Download PDF Research Article Alternative Credit Assessment and the Real Effects of Bank Branch Closures: Evidence from Fintech Lending and Behavioral Creditworthiness Alina Malkova This is a preprint; it has not been peer reviewed by a journal. https://doi.org/ 10.21203/rs.3.rs-8899285/v1 This work is licensed under a CC BY 4.0 License Status: Posted Version 1 posted You are reading this latest preprint version Abstract \noindent I construct and validate a behavioral creditworthiness index---measuring payment history, income stability, and financial resilience---using panel data on low-to-moderate income homeowners. The index achieves strong predictive power for mortgage default (AUC~=~0.93) across geographic environments, including banking deserts and underserved communities. Individuals scoring higher on financial resilience exhibit smaller self-employment declines following bank branch closures. However, linking borrower-level data to mortgage origination records reveals that fintech market presence does not buffer closure effects, suggesting fintech lenders enter retreating markets without substituting for relationship lending. \medskip\noindent\textbf{Keywords:} Fintech, alternative credit assessment, bank branch closures, self-employment, financial inclusion \medskip\noindent\textbf{JEL Codes:} G21, G23, G51, L26, R12 JEL Codes: G21, G23, G51, L26, R12 Fintech alternative credit assessment bank branch closures self-employment financial inclusion Full Text Additional Declarations No competing interests reported. Cite Share Download PDF Status: Posted Version 1 posted You are reading this latest preprint version Research Square lets you share your work early, gain feedback from the community, and start making changes to your manuscript prior to peer review in a journal. As a division of Research Square Company, we’re committed to making research communication faster, fairer, and more useful. We do this by developing innovative software and high quality services for the global research community. Our growing team is made up of researchers and industry professionals working together to solve the most critical problems facing scientific publishing. Also discoverable on Platform About Our Team In Review Editorial Policies Advisory Board Help Center Resources Author Services Accessibility API Access RSS feed Manage Cookie Preferences © Research Square 2026 | ISSN 2693-5015 (online) Privacy Policy Terms of Service Do Not Sell My Personal Information {"props":{"pageProps":{"initialData":{"identity":"rs-8899285","acceptedTermsAndConditions":true,"allowDirectSubmit":true,"archivedVersions":[],"articleType":"Research Article","associatedPublications":[],"authors":[{"id":597199298,"identity":"7dec568f-952a-43ee-a8c2-ecb84f974097","order_by":0,"name":"Alina Malkova","email":"data:image/png;base64,iVBORw0KGgoAAAANSUhEUgAAAZAAAAAyAQMAAABI0h/eAAAABlBMVEX///8AAABVwtN+AAAACXBIWXMAAA7EAAAOxAGVKw4bAAAAwklEQVRIiWNgGAWjYHACxoMNQJKfGUwxE6cHrFayLbGxgTQtBscSGInTwj/t8IODMyoOyxsfY25/wFBhndhASIvE7TSDgxvOHDbcdowR6LAz6YS1MNxOMDj4sC2Ncdv9xsYGxrbDhLXI307/ANJiv7kNaAvjPyK0GNzOMTi4sc0mcQMbSEsDEVoMb+cUHJxxxiZ5BtAvMxKOpRsT1CJ3O33jw54KCdv+NvYHHz7UWMsS1IIKEkhTPgpGwSgYBaMAFwAAE5RJx6Q/s64AAAAASUVORK5CYII=","orcid":"","institution":"Florida Institute of Technology","correspondingAuthor":true,"prefix":"","firstName":"Alina","middleName":"","lastName":"Malkova","suffix":""}],"badges":[],"createdAt":"2026-02-17 08:55:30","currentVersionCode":1,"declarations":"","doi":"10.21203/rs.3.rs-8899285/v1","doiUrl":"https://doi.org/10.21203/rs.3.rs-8899285/v1","draftVersion":[],"editorialEvents":[],"editorialNote":"","failedWorkflow":false,"files":[{"id":103762393,"identity":"4a1b83a8-33d4-468c-ad34-613f12e7c770","added_by":"auto","created_at":"2026-03-02 15:24:22","extension":"pdf","order_by":1,"title":"","display":"","copyAsset":false,"role":"manuscript-pdf","size":346473,"visible":true,"origin":"","legend":"","description":"","filename":"FintechLaTeXError.pdf","url":"https://assets-eu.researchsquare.com/files/rs-8899285/v1_covered_909656e9-492a-4c89-9b0d-5457165f706e.pdf"}],"financialInterests":"No competing interests reported.","formattedTitle":"Alternative Credit Assessment and the Real Effects of Bank Branch Closures: Evidence from Fintech Lending and Behavioral Creditworthiness","fulltext":[],"fulltextSource":"","fullText":"","funders":[],"hasAdminPriorityOnWorkflow":false,"hasManuscriptDocX":false,"hasOptedInToPreprint":true,"hasPassedJournalQc":"","hasAnyPriority":false,"hideJournal":true,"highlight":"","institution":"","isAcceptedByJournal":false,"isAuthorSuppliedPdf":true,"isDeskRejected":"","isHiddenFromSearch":false,"isInQc":false,"isInWorkflow":false,"isPdf":true,"isPdfUpToDate":true,"isWithdrawnOrRetracted":false,"journal":{"display":true,"email":"[email protected]","identity":"researchsquare","isNatureJournal":false,"hasQc":true,"allowDirectSubmit":true,"externalIdentity":"","sideBox":"","snPcode":"","submissionUrl":"/submission","title":"Research Square","twitterHandle":"researchsquare","acdcEnabled":true,"dfaEnabled":false,"editorialSystem":"","reportingPortfolio":"","inReviewEnabled":false,"inReviewRevisionsEnabled":true},"keywords":"Fintech, alternative credit assessment, bank branch closures, self-employment, financial inclusion","lastPublishedDoi":"10.21203/rs.3.rs-8899285/v1","lastPublishedDoiUrl":"https://doi.org/10.21203/rs.3.rs-8899285/v1","license":{"name":"CC BY 4.0","url":"https://creativecommons.org/licenses/by/4.0/"},"manuscriptAbstract":"\u003cp\u003e\\noindent I construct and validate a behavioral creditworthiness index---measuring payment history, income stability, and financial resilience---using panel data on low-to-moderate income homeowners. 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