Non-bank lenders, particularly in the fintech space, have revolutionized access to financial services, promoting financial inclusion through innovative technologies. However, the lack of information sharing among these lenders has raised concerns about transparency and potential credit risks, particularly in the "buy now, pay later" (BNPL) sector. This article explores the effects of credit reporting regulations on BNPL usage, focusing on a significant policy change in China in 2021 that integrated Huabei, a major BNPL provider, into the national credit registry. By analyzing a dataset of 200,000 BNPL users, the study reveals that the introduction of credit reporting led to a 14% reduction in BNPL usage among consumers. This decline was more pronounced among users with default histories and influenced the profile of new users adopting BNPL services. Additionally, survey data indicated that concerns over credit records were a primary reason for reduced usage. Overall, the findings suggest that credit reporting can effectively mitigate overborrowing risks associated with BNPL.
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