FinTech and SMEs financing: A systematic literature review and bibliometric analysis

Abstract

Small and medium-sized enterprises (SMEs) face obstacles in raising capital and accessing financial services due to information asymmetry, high transaction costs and lack of collateral. FinTech developments have made gathering and sharing information easier, changed how funds are mobilized and allocated, and increased capital-raising activities. This paper conducts a systematic literature review on FinTech and SME financing for the period 2008–2022. So far there are unstructured and separate publications on this topic. Therefore, there is a need to consolidate the empirical research and their findings on the effectiveness of FinTech in meeting SMEs' financing needs. The bibliometric findings show that few studies on FinTech and SME financing are empirical in nature. These empirical studies surged a decade later after FinTech 3.0 started in 2008, with the majority of them using quantitative methods based on data from surveys and FinTech platforms. Furthermore, emerging alternative digital financing to SMEs have attracted more empirical studies than those on FinTech and bank lending to SMEs. In terms of publications, China is dominating, followed by the United States. The content analysis shows that FinTech has increased the ability of financial and non-financial institutions to collect and process accurate information about SMEs, thus reducing information asymmetry and transaction costs. FinTech has also increased the speed and quality of the lending cycle, from establishing an SME pipeline, collecting and processing information, to loan screening, monitoring and repayment. Finally, the paper presents research gaps and areas for future studies, challenges and policy recommendations on this novel subject.