Journal of African Development

Micro, Small, and Medium Enterprises (MSMEs) are considered the backbone of the Indian economy due to their significant contribution to employment generation, industrial production, exports, and inclusive economic development. Despite their economic importance, MSMEs have historically faced multiple barriers in accessing formal financial services, including lack of collateral, high borrowing costs, lengthy loan approval procedures, and inadequate financial documentation. In recent years, digital lending platforms and FinTech integration have emerged as transformative solutions that aim to improve financing accessibility, operational efficiency, and financial inclusion for MSMEs in India.

The present study examines the impact of digital lending and FinTech integration on MSME financing efficiency in India. The research focuses on understanding how digital financial technologies such as mobile banking, online lending platforms, artificial intelligence-based credit assessment systems, and digital payment ecosystems contribute to faster loan approvals, reduced transaction costs, improved credit accessibility, and enhanced financial transparency. The study also investigates the challenges faced by MSMEs in adopting digital financial systems, including cybersecurity risks, digital illiteracy, and infrastructural limitations.

The research adopts a quantitative and descriptive research design. Primary data was collected from 250 MSME owners and managers through a structured questionnaire based on a five-point Likert scale. Statistical tools such as percentage analysis, correlation analysis, regression analysis, and hypothesis testing were used for data interpretation. Secondary data was collected from research journals, RBI reports, World Bank publications, and MSME ministry reports.

The findings of the study reveal that digital lending and FinTech integration have a significant positive impact on MSME financing efficiency. Digital financial systems reduce loan processing time, improve credit accessibility, and enhance operational flexibility for MSMEs. The study concludes that strengthening digital infrastructure, improving financial literacy, and promoting collaboration between banks and FinTech firms are essential for enhancing MSME financial inclusion and long-term economic sustainability...