LAUSR

This paper explores the relationships among micro- and small-sized enterprises’ (MSEs) willingness to borrow from internet financial services (IFS) and the related impacts of coronavirus disease 2019 (COVID-19) and then analyses the mediating effects of their beliefs on the advantages and disadvantages of IFS. We further analyse the differences produced by the moderator effects of MSEs’ enterprise variables (sector, operating years, entrepreneur's education, profit margin, and employee number) on the above relationships. We collected 632 valid reports by developing an online questionnaire in China and employing judgement sampling of MSEs with fewer than 50 employees and annual operating income less than RMB 5 million. Then, we analysed the findings with partial least squares structural equation modelling. The results show that COVID-19 significantly impacted most Chinese MSEs and that most Chinese MSEs tend to borrow via IFS, but the amount and period of MSEs’ willingness to borrow should not be affected by the impacts of COVID-19 on MSEs. Rather, the explanation concerns the greater unfamiliarity or uncertainty concerning IFSs relative to traditional financial instruments. Moreover, MSEs' understanding of IFS's advantages and disadvantages has significant adverse mediating effects on the relationship between MSEs' willingness to borrow via IFS and the impacts of COVID-19. Furthermore, the enterprise variables of MSEs, namely, their industry type, entrepreneur’s education, number of employees, profit margin, and operating years, have significant moderating effects on these relationships. The results have implications for the government’s comprehensive supervision system for IFS risks, IFS firms’ enterprise performance, risk survey, and information disclosure systems, and the development of customer-specific and easy-to-use marketing strategies for IFS firms.