“The Gordian Knot is Cut!”: The Promise of Fintech and the Politics of Financial Infrastructures

Authors: Georgia Hartman*,
Topics: Cultural Geography, Development, Urban Geography
Keywords: fintech, development, financialization, housing, mortgage
Session Type: Paper
Day: 4/5/2019
Start / End Time: 3:05 PM / 4:45 PM
Room: Capitol Room, Omni, East
Presentation File: No File Uploaded

The World Bank estimates that by 2030, 40 percent of the world’s population will need 300 million new housing units. Having accepted the established wisdom that the state-directed housing provision is inefficient and ineffective, the Bank suggests that governments should focus their resources on the development of “deep, affordable & resilient housing finance markets”. Financial markets promise a total solution to the traditional challenges of housing provision: mortgage credit for low-income borrowers covers the up-front costs of buying a home and the securitization of that debt leverages institutional investors to help cover costs. A crucial first step to the creation of such markets is to render the land upon which a home sits and the people who borrow mortgage credit legible to the market. In states with politicized and/or nonexistent cadastral records, large “unbanked” populations, and undeveloped credit bureaus, this presents a significant challenge. How can private companies invest in land with an unclear title? How can lenders extend credit to someone whose “creditworthiness” is not easily verifiable? Fintech companies have stepped into this void, promising that blockchain technology and the creative use of consumer data will resolve the intractable challenges of creating reliable land registries and credit bureaus. I argue that the Panglossian narrative of data-driven financial development obscures the social and political processes central to finance and data science. This paper examines the fintech narratives stimulating much excitement among international housing finance experts and considers the social and political implications of replacing state infrastructures with calculative technologies.

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