Can Digital Inclusive Finance Improve the Financial Performance of SMEs?

Our paper takes the sample of listed companies from Shanghai and Shenzhen A-share SMEs and then theoretically analyzes and empirically tests the impact of digital inclusive finance on the financial performance of SMEs. The results show that financial performance of SMEs located in areas with a higher level of digital inclusive finance is significantly higher. Digital inclusive finance can play a role in expanding the scale of innovative investment, reducing the cost of debt financing and improving the ability of risk-taking, thereby strengthening the financial performance of SMEs. Our findings enrich the academic research on the topic of digital inclusive finance from the perspective of SMEs and provide suggestions to the government, banks and SMEs to continually implement the digital inclusive finance policy.

Automated summary

Our paper analyzes the impact of digital inclusive finance on the financial performance of SMEs by studying listed companies in Shanghai and Shenzhen A-share SMEs. The results indicate that SMEs in areas with higher levels of digital inclusive finance have significantly better financial performance. Digital inclusive finance can facilitate innovative investment, reduce debt financing costs, and improve risk-taking ability, ultimately strengthening SMEs' financial performance. These findings contribute to academic research on digital inclusive finance and offer recommendations for government, banks, and SMEs to continue implementing digital inclusive finance policies.