Mitigating private lending risk through FinTech: evidence from millions of judicial disputes in China

Using more than four million court verdicts from China Judgements Online during 2014–2020, this study constructs a city-level private lending risk index and examines the effect of FinTech on private lending risk. We find that FinTech significantly mitigates private lending risk, and the result remains robust across alternative measures and identification strategies. The effect is stronger in regions with relatively weak financial regulation and in regions with better-developed market mechanisms and legal environments, revealing substantial institutional heterogeneity in the effectiveness of FinTech. Quantile estimates further show that the risk-mitigating effect weakens and becomes statistically insignificant when private lending risk is already very high. These findings extend the FinTech and credit-risk literature to decentralized private lending and clarify the institutional and risk conditions under which the effectiveness of FinTech varies.