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FinTech Adoption in SMEs and Bank Credit Supplies: A Study on Manufacturing SMEs

Author

Listed:
  • Shafiq Ur Rehman

    (School of Finance and Banking, University of Utara Malaysia, Sintok 06010, Kedah, Malaysia)

  • Mustafa Al-Shaikh

    (College of Business, Zarqa University Jordan, Zarqa P.O. Box 2000, Jordan)

  • Patrick Bernard Washington

    (Department of Business Administration, Morehouse College, Atlanta, GA 30314, USA)

  • Ernesto Lee

    (Data Analytics, School of Engineering and Technology, Miami Dade College, Miami, FL 33132, USA)

  • Ziheng Song

    (School of Engineering and Applied Sciences, Columbia University in the City of New York, New York, NY 10027, USA
    Allen School of Engineering and Computing, Trine University, Angola, IN 46703, USA)

  • Ibrahim A. Abu-AlSondos

    (American University in the Emirates (AUE), Dubai 503000, United Arab Emirates)

  • Maha Shehadeh

    (Department of Finance and Banking, Applied Science Private University, Al-Arab St. 21, Amman 11931, Jordan)

  • Mahmoud Allahham

    (Department of Business Administration, Middle East University, Airport Rd., Amman 11831, Jordan)

Abstract

Bank lending to SMEs plays a vital role in economic growth, contributing significantly to employment and GDP. Access to bank lending is crucial for small- and medium-sized enterprises (SMEs), as they contribute significantly to global employment and GDP. New financial technologies promise better bank operations, fewer costs, and enhanced credit supply to SMEs. However, there is still a lack of empirical findings on how these technologies can solve demand-side bank lending problems for small- and medium-sized firms. This study gathered data from a sample of 381 respondents, comprising CEOs, managers, officers, loan managers, IT consultants, and other relevant stakeholders. The findings indicate that the adoption of blockchain technologies, as well as the adoption of Big Data technologies encompassing cloud computing, data analytics, algorithms, and programming, along with the adoption of mobile banking technologies, have had a substantial positive impact on bank credit supplies for small- and medium-sized enterprises (SMEs) in Pakistan. This novel study contributes to existing knowledge in two ways. First, it provides knowledge to SMEs looking to adopt new technologies; second, it provides knowledge to a manager looking to finance the SMEs with information asymmetries. This research also provides key findings for researchers and policymakers.

Suggested Citation

  • Shafiq Ur Rehman & Mustafa Al-Shaikh & Patrick Bernard Washington & Ernesto Lee & Ziheng Song & Ibrahim A. Abu-AlSondos & Maha Shehadeh & Mahmoud Allahham, 2023. "FinTech Adoption in SMEs and Bank Credit Supplies: A Study on Manufacturing SMEs," Economies, MDPI, vol. 11(8), pages 1-15, August.
    • Handle: RePEc:gam:jecomi:v:11:y:2023:i:8:p:213-:d:1217135
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    References listed on IDEAS

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    1. Giulio Cornelli & Jon Frost & Leonardo Gambacorta & Raghavendra Rau & Robert Wardrop & Tania Ziegler, 2021. "Fintech and Big Tech Credit: What Explains the Rise of Digital Lending?," CESifo Forum, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 22(02), pages 30-34, March.
    2. Prasanna Tantri, 2020. "Creditors’ Rights and Strategic Default: Evidence from India," Journal of Law and Economics, University of Chicago Press, vol. 63(3), pages 411-447.
    3. Prasanna Tantri, 2021. "Fintech for the Poor: Financial Intermediation Without Discrimination [Predatory lending and the subprime crisis]," Review of Finance, European Finance Association, vol. 25(2), pages 561-593.
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    Cited by:

    1. Tu D. Q. Le & Thanh Ngo & Dat T. Nguyen, 2023. "Digital Credit and Its Determinants: A Global Perspective," IJFS, MDPI, vol. 11(4), pages 1-12, October.

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