CEDE Seminar - Margarita Gáfaro

This paper examines the impact of Internet expansion on banking competition and credit access in rural Colombia. Using a staggered rollout of the National Fiber Optic Program from 2013 to 2016, we analyze the effects of broadband availability on public and private bank lending. We find that Internet connectivity reduced loan disbursements from the state-run Banco Agrario de Colombia (BAC) while increasing private bank lending, particularly for small enterprises. The shift was initially driven by reduced information frictions and later reinforced by new private bank entry. The findings suggest that Internet access facilitates competition and improves borrower outcomes by increasing access to better-matching credit products.