The Role of Fintech in Enhancing Small Business Financing in Emerging Economies

Abstract

Access to finance remains a critical barrier for small businesses in emerging economies. This study explores the role of financial technology (Fintech) in improving financing accessibility for micro, small, and medium enterprises (MSMEs) in India, Kenya, and Brazil. Using a mixed-method approach involving surveys of 1,200 business owners and interviews with 30 Fintech companies, the research finds that digital lending platforms, mobile payment solutions, and blockchain-based credit scoring significantly reduce financing gaps. Fintech adoption not only accelerates loan approval processes but also enables data-driven risk assessment, allowing lenders to extend credit to previously underserved businesses. However, challenges such as cybersecurity threats, regulatory ambiguity, and limited digital literacy among entrepreneurs persist. The study emphasizes the need for coordinated policy measures, capacity-building programs, and inclusive digital infrastructures to maximize the benefits of Fintech for economic development. The findings have important implications for policymakers, financial institutions, and business owners seeking to leverage technology for sustainable growth.