Banks are starting to care more about who you know than how much money you actually have when they’re deciding on your loan.
arXiv · March 16, 2026 · 2603.12417
Why it matters
We usually assume creditworthiness is based on how much money or collateral a company has. This study shows that network 'topology' has become a primary proxy for trust, effectively replacing physical collateral even for small businesses.
From the abstract
A central challenge in financial economics is understanding how credit networks form under informational noise. We introduce the concept of topological capital, arguing that banks increasingly rely on topological certification, interpreting a borrower's connectivity as a primary proxy for creditworthiness. Using a novel dataset of bank-firm relationships manually extracted from Italian financial statements, we implement a multi-stage empirical framework, benchmarking empirical patterns against a