The Rise of Direct Lending: Important Questions that Require New Data Sets to Answer

Amir Sufi, Bruce Lindsay Professor of Economics and Public Policy
Young Soo Jang, Finance PhD Student

Since the Global Financial Crisis, corporate lending has increasingly shifted away from the banking system. Fintech lenders, finance companies, and direct lenders have gained market share, especially among middle market and small businesses.  The study of this important pattern is hindered by data availability. Even exciting new data sets at the Federal Reserve such as the Y-14 database do not cover non-bank lenders, and even adminstrative micro data sets from the Census and the Internal Revenue Service do not reveal the identities of lenders. This proposal outlines the data sets that are ideal for the study of the rise in non-bank lending, and it highlights a broad research project on the rise in direct lending in particular that can be conducted with these data in hand.