The impact of digital financial infrastructure on regional economic development and SME financing

Li, Mengsi and Neszmélyi, György Iván and Wei, Ziji (2026) The impact of digital financial infrastructure on regional economic development and SME financing. In: Futures in the making - Developing and adapting futures in business - BUEB Day of Hungarian Science 2024. Budapesti Gazdaságtudományi Egyetem, Budapest, pp. 22-38. ISBN 9786156886255

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Abstract

Driven by globalization and the rapid expansion of the Internet, mobile payments have transformed the financial environment. Traditional economies are influenced by these shifts. In addition to boosting economic growth in a variety of countries, the establishment and expansion of digital financial infrastructure have facilitated globalization and economic relations. The growth and extension of digital financial infrastructure have substantially enhanced economic development, diversity and potential. However, it has also generated problems, particularly in less developed regions where infrastructure issues and slow growth have caused local economies to lag behind, exacerbating economic disparity among the regions. Many small and medium-sized enterprises around the world face high interest rates and financing concerns, and the uncertainty surrounding development has forced many commercial banks to tighten their lending conditions. One reason for the lack of a complete system is the flawed finance guarantee mechanism, which means big banks are reluctant to lend to small enterprises. The rise of digital financial infrastructure, particularly the acceptance of digital currencies, affects the funding of small and medium-sized enterprises. The rapid expansion of Internet banking and peer-to-peer lending platforms has allowed the financial services sector to provide a wider range of services to small and medium-sized enterprises. Big data and model testing have made peer-to-peer lending easier for these enterprises, enabling commercial banks to fund them more quickly and effectively. In light of these issues, this study will explore the impact of digital financial infrastructure on regional development, with a particular focus on the financing of small and medium-sized enterprises. It will demonstrate how the creation of digital financial infrastructure improves regional economic development, financial inclusion, transaction costs, cross-border trade, financial innovation, and the financing of small and medium-sized enterprises.

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