Filling the SME credit gap: a systematic review of blockchain-based SME finance literature

Abstract

PurposeThe review examines the existing literature on blockchain-based small and medium enterprise (SME) finance and highlights its trend, themes, opportunities and challenges. Based on these factors, the authors create a framework for the existing literature on blockchain-based SME financing and lay down future research paths.Design/methodology/approachThe review follows a systematic approach. It includes 53 articles encompassing multiple dimensions of blockchain-based SME finance, including peer-to-peer lending platforms, supply chain finance (SCF), decentralized lending protocols and tokenization of assets. The review critically evaluates these approaches' theoretical underpinnings, empirical evidence and practical implementations.FindingsThe review demonstrates that blockchain-based SME finance holds significant promise in addressing the credit gap by leveraging blockchain technology's decentralized and transparent nature. Benefits identified include reduced information asymmetry, improved access to financing, enhanced credit assessment processes and increased financial inclusion. However, the literature acknowledges several challenges and limitations, such as regulatory uncertainties, scalability issues, operational complexities and potential security risks.Originality/valueThe article contributes to the growing knowledge of blockchain-based SME finance by synthesizing and evaluating the existing literature. It also provides a framework for the existing literature in the area and future research paths. The study offers insights for researchers, policymakers and practitioners seeking to understand the potential of blockchain technology in filling the SME credit gap and fostering economic development through improved access to finance for SMEs.

Blockchain technology and its importance for the growth and prosperity of Indian small and medium-sized enterprises

“…The unwavering commitment shown by the Republic of China to adopt BT in their SMEs, especially their financial operations, is commendable. China embraced digital innovation through dynamic government policies, strong Rena: Block chain technology technological infrastructure, collaboration among the academia, research, and industry helps them in applying the technology in a wide-range of industries (Kumar et al, 2023). Although the government of India has already framed a strategy for BT, the development is still at a nascent stage while prime importance should be given for this disruptive technology.…”

Factors affecting access to finance for small and medium-sized agricultural enterprises in Vietnam

“…Furthermore, Bruton, Khavul, Siegel, and Wright (2015) and Mullineux and Murinde (2003) critically evaluate the role of alternative financial institutions like microf inance in promoting financial inclusivity and education for smaller or higher-risk SMEs. Kumar, Phani, Chilamkurti, Saurabh, and Ratten (2023) argue that a robust financial infrastructure can simplify lending processes and foster reciprocal trust between financial institutions and SMEs. Conversely, Quartey, limited access to finance and increased borrowing costs, affecting SME growth and financial literacy.…”