Internet Finance, Financing of Small and Micro Enterprises and the Macroeconomy

Financial technology (fintech) has seen fast development recently in China; however, studies exploring the contributions of fintech to China’s economic growth remain limited. Thus, this study motivated by the knowledge gaps and fast expansion of fintech examined: (i) the impact of fintech and the submeasures of third-party payment, credit, and insurance on China’s economic growth; (ii) the regional and provincial impact of fintech on China’s economic growth; (iii) the causality relationships between fintech and economic growth. By using a sample of 31 provinces in China and the instrumental variable generalized method of moments (IV–GMM) technique, the study established the following: (i) fintech and the submeasures of third-party payment, credit, and insurance have a statistically significant positive effect on China’s economic growth. Specifically, a 10% rise in fintech, third-party payment, credit, and insurance raises China’s economic growth by 8%, 4%, 5%, and 16%, respectively; (ii) the eastern region has the highest growth effect of fintech. Moreover, Zhejiang province has the highest growth effect of fintech at the provincial level; (iii) a unidirectional causality exists from third-party payment and credit to economic growth, and economic growth to insurance; a bidirectional causality exists between fintech and economic growth. This article explicitly suggests substantial institutional reforms to promote the healthy development of fintech in China.

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“…Recently, ref. [33][34][35][36] also established a positive association between fintech and economic growth in China.…”

Section: Literature Reviewmentioning

confidence: 87%

The Impact of Fintech on Economic Growth: Evidence from China

Song

Appiah-Otoo

2022

Sustainability

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“…With zero manual intervention and online risk control, FinTech has increased the number of small businesses obtaining loans [ 187 ]. With the rise of these financial technologies, competition between banks and FinTech firms has become evident and alleviated the financial constraints of small businesses in China by offering more loans to small businesses [ 111 ].…”

Section: Thematic Analysismentioning

confidence: 99%

“…The transition from traditional finance to Internet finance reduces information asymmetry and cost risks, increasing the number of micro and small enterprises obtaining loans. Through capital accumulation, SMEs allocate resources for more production, employment, and consumption, which has an aggregate effect on the economy [ 187 ].…”

Section: Thematic Analysismentioning

confidence: 99%

Small businesses and FinTech: a systematic review and future directions

Sharma

Ilavarasan

Karanasios

2023

Electron Commer Res

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Small businesses are significant to any economy from the perspective of employment and contribution to the national gross domestic product. Despite their significance, small businesses continue to face various unresolved challenges. Recent technological innovations in finance, collectively called FinTech, seem to address some challenges. FinTech-led business models like crowdfunding, peer-to-peer lending, invoice trading, mobile wallets and payments, and platform-driven supply chain finance are altering the ecosystem for small businesses. Though there have been efforts, insights on how small businesses have responded to the opportunities of FinTech appear to be limited. To address this, we conducted a systematic and cross-discipline literature review of 103 journal articles published between 2008 to 2023 on small businesses and FinTech. Four conceptual themes emerge from the analysis: usage of FinTech services (payment and financial), and impact of FinTech services (payment and financial) on small businesses. The paper articulates areas for future research. Supplementary Information The online version contains supplementary material available at 10.1007/s10660-023-09705-5.

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“…As a result, tackling the problems of financial exclusion necessitates more governmental involvement as well as the existence of real public-private partnerships aimed at bringing more people into the mainstream financial system [96].…”

Section: Literature Reviewmentioning

confidence: 99%

The Impact of Financial Technological Advancement (FinTech) on the Economic Growth: Evidence from Palestine

Badwan

Awad

2022

AJEBA

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This study examined the impact of financial technology FinTech on economic growth in Palestine, moreover, the study used annual time series data from the Palestinian Ministry of National Economy (MoNE), the Palestinian Ministry of Finance and Planning (MoFP), as well as the Palestinian Central Bureau of Statistics (PCBS) and the Palestinian Monetary Authority (PMA), in addition to investigating the current study of the impact of FinTech on Palestinian economic development for the period (2008 to 2021). In addition, the co-integration was evaluated using a distributed autoregressive approach, and a vector error correction model was used to consider long- and short-term causation. However, the data shows that FinTech products (number of people using the Internet, number of broadband subscriptions, number of mobile cellular subscriptions, number of automated transfer machines, number of branches) contribute to the growth in financial inclusion, which in turn fuels the growth economy in Palestine. Moreover, these results indicate that the (PMA) in Palestine is focusing more on expanding access to financial services. Moreover, this study aims to explore opinions and attitudes regarding the emergence of financial technology in Palestine's future financial services industry. The study’s objectives were also achieved by speaking to a group of managers in the banking and financial services industries, who were administrative employees from departments with technical, software and information technology departments, in addition to departments specialized in technological fields electronic payment services. The study analysis was performed based on the objectivity of the data collected. The approach used in this study was used to produce and rank data-related results for these traits and patterns. According to the findings of the study, it is critical that existing banking and financial institutions, academic institutions, technology companies and business incubators work together to build a supportive environment for the Fintech system in Palestine. According to the ADFGLS co-integration test results, all variables are stable at the initial difference. The results of the ARDL technique show that the co-integration of the variables occurs and that the null hypothesis is rejected. The VECM results show that fintech products have a long-term and short-term causal relationship with both economic growth and financial development. Thus, the results indicate that financial technology in Palestine has many obstacles: rules and regulations, cybersecurity, customer distrust of digital services, etc. All of this is believed to have a direct and beneficial impact on the Palestinian economy.

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Internet Finance, Financing of Small and Micro Enterprises and the Macroeconomy

Cited by 10 publications

References 9 publications

The Impact of Fintech on Economic Growth: Evidence from China

The Impact of Fintech on Economic Growth: Evidence from China

Small businesses and FinTech: a systematic review and future directions

The Impact of Financial Technological Advancement (FinTech) on the Economic Growth: Evidence from Palestine

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