Abstract: The various emerging investment and financing services based on digital technology led by BigTech have achieved rapid growth in recent years because of the low access threshold, which enables numerous long tail customers excluded by commercial banks to obtain basic financial services. The question that whether the development of digital finance will promote or restrain commercial bank lending arouses our interest. We match the Peking University Digital Financial Inclusion Index with the loan data of 1,326 prefecture-level commercial bank branches to carry out an empirical study. The results show that digital finance can both significantly promote and restrain commercial bank lending. Specifically, the coverage breadth of digital finance will promote commercial bank lending. With one standard deviation increase in the Coverage Breadth Index of Digital Financial Inclusion, the bank loan increases by 18.64%. Meanwhile, the usage depth of digital finance will restrain commercial bank lending. One standard deviation increase in the Usage Depth Index of Digital Financial Inclusion will reduce bank loan by 11.94%. We refer to the above two cases as spillover effect and extrusion effect of digital finance on commercial bank lending respectively. After considering endogeneity and robustness tests, both effects still exist simultaneously. The paper further examines the heterogeneous impacts of digital finance on commercial bank lending from the perspectives of regional differences and commercial bank heterogeneity, and verifies the internal mechanism of spillover effect and extrusion effect of digital finance. The findings of this paper are obviously of reference value to the development of digital finance, the transformation of commercial banks and the reform of financial industry.

Key words: digital finance, digital inclusive finance, bank lending, spillover effect, extrusion effect