DP15276 Credit demand vs. supply channels: Experimental- and administrative-based evidence
We identify the relative importance for lending of borrower (demand) versus bank (supply) factors.
We submit thousands of fictitious mortgage applications, changing one borrower-level factor at time,
to the major Italian online mortgage platform. Each application goes to all banks. We find that
borrower and bank factors are equally strong in causing and explaining loan acceptance. For pricing,
borrower factors are instead stronger. Moreover, banks supplying less credit accept riskier borrowers.
Exploiting the administrative credit register, we show borrower-lender assortative matching, and that
the bank-level strength measure, estimated on the experimental data, determines credit supply and
risk-taking to real firms.