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Research Details

Changing Banking's DNA: The Impact of Fintechs on Small Business Lending

Abstract

The rise of financial technology companies—"fintechs"—is changing the way money moves around the world, leading to greater financial inclusion and closing a credit gap that historically has hampered small businesses. According to the World Bank, small and medium enterprises (SMEs) is the engine driving world economies, representing 90 percent of all businesses worldwide, providing 50 percent of all employment, and responsible for up to 40 percent of national income in developing economies. Even so, research has shown that 65 million businesses—or 40 percent of SMEs in developing economies—face an unmet financing need of $5.2 trillion per year. This gap translates to 19 percent of the gross domestic product of the 128 countries surveyed and attests to the vital role that SMEs play in the world economy as a driver of employment and overall economic health.

Type

Case

Author(s)

Sarit Markovich, Richard I. Kolsky, Charlotte Snyder

Date Published

03/22/2021

Discipline

Strategy

Key Concepts

banks and banking, fintech, marketing strategy, small and medium-sized enterprises, Amazon, China

Citations

Markovich, Sarit, Richard I. Kolsky, and Charlotte Snyder. Changing Banking's DNA: The Impact of Fintechs on Small Business Lending. Case 5-220-250 (KE1186).

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