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FinTech and Financial Inclusion in MSMEs: A Systematic Literature Review and Socio-Technical Framework in Emerging Economies
* Corresponding author: Dr. Boudour Abdessalem Bzeouich, PhD, Unit of Scientific Research, Applied College, Qassim University, Buraydah, Saudi Arabia. b.bzeouich@qu.edu.sa
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Received: ,
Accepted: ,
How to cite this article: Bzeouich BA. FinTech and Financial Inclusion in MSMEs: A Systematic Literature Review and Socio-Technical Framework in Emerging Economies. J Adm Econ Sci. doi: 10.25259/JAES_21_2026
Abstract
Financial inclusion has become a fundamental pillar of sustainable economic development, particularly in developing economies where micro, small, and medium enterprises (MSMEs) continue to face significant barriers in accessing formal financial services. In this context, financial technology (FinTech) has emerged as a transformative force reshaping financial systems through innovations such as digital payments, mobile banking, and alternative lending mechanisms. Despite its rapid expansion, the extent to which FinTech effectively promotes inclusive financial outcomes remains fragmented and highly context-dependent in the existing literature. This study provides a systematic literature review of 25 peer-reviewed studies published between 2010 and 2025, selected from major academic databases following rigorous inclusion and exclusion criteria. The findings indicate that FinTech enhances financial inclusion by reducing transaction costs, expanding geographical outreach, and enabling alternative credit assessment models. However, its impact is neither uniform nor automatic, as financial inclusion outcomes are critically influenced by digital and financial literacy, digital infrastructure, and regulatory frameworks. The study contributes by proposing a socio-technical framework that conceptualises financial inclusion as a multidimensional outcome emerging from the interaction between technological, human, and institutional factors. From a policy perspective, the results highlight the need for coordinated and context-specific strategies to ensure inclusive and sustainable FinTech ecosystems.
Keywords
Digital finance
Emerging economies
Financial inclusion
Financial literacy
FinTech
MSMEs
G21
G23
G28
O16
O33
L26
D14
1. INTRODUCTION
Financial inclusion has become a central component of sustainable development strategies, particularly in developing economies where micro, small, and medium enterprises (MSMEs) face persistent barriers in accessing formal financial services. These barriers include limited credit history, high transaction costs, lack of collateral, and geographical exclusion from traditional banking systems. As a result, a large proportion of MSMEs remain financially underserved despite their critical role in employment generation and economic growth.1,2
Financial technology (FinTech) refers to the application of innovative digital technologies to deliver, improve, and automate financial services and processes. FinTech encompasses a wide range of innovations, including mobile banking, digital payments, peer-to-peer lending, blockchain applications, and artificial intelligence-based financial solutions.3 These technologies aim to increase efficiency, reduce transaction costs, and expand access to financial services.
Financial inclusion refers to the availability, accessibility, and effective use of affordable financial products and services by individuals and businesses, particularly those traditionally excluded from the formal financial system.4 It includes access to savings, credit, insurance, and payment services that support economic participation and financial well-being. In the context of MSMEs, financial inclusion is considered a critical driver of business development, resilience, and sustainable economic growth. The relationship between FinTech and financial inclusion has attracted increasing scholarly attention, as digital financial innovations are widely considered a key mechanism for expanding access to formal financial services, particularly among underserved populations and MSMEs in developing economies. Understanding these two concepts and their interaction is therefore essential for evaluating the potential of FinTech to promote inclusive and sustainable economic development.
In recent years, financial technology (FinTech) has emerged as a transformative force reshaping the global financial ecosystem. Through innovations such as mobile banking, digital wallets, peer-to-peer lending, and artificial intelligence-based credit scoring, FinTech has significantly reduced the cost and complexity of financial transactions while expanding access to previously excluded populations.5 Evidence shows that mobile money and digital financial platforms have played a particularly important role in improving access to credit and savings services in developing countries.6
Several studies confirm that FinTech contributes positively to financial inclusion by enhancing accessibility, affordability, and efficiency of financial services.7 For instance, digital lending and mobile payment systems enable MSMEs to access financial services without relying on traditional banking infrastructure, thereby improving financial resilience and operational efficiency.8 This conclusion is further supported by recent systematic reviews examining FinTech lending and financial inclusion.9
Furthermore, FinTech innovations have been linked to poverty reduction and economic empowerment in emerging economies through improved access to financial resources.10 Digital microfinance initiatives have also been associated with improved access to financial services and poverty alleviation among vulnerable populations.11
However, despite these advantages, the adoption and effectiveness of FinTech are constrained by several structural and behavioural barriers. Low levels of digital and financial literacy, inadequate digital infrastructure, cybersecurity risks, and weak regulatory frameworks remain major obstacles to inclusive FinTech adoption.12 In addition, disparities in access between urban and rural populations continue to widen the digital financial divide.4
Although existing literature extensively discusses FinTech and financial inclusion independently, there is still limited integrated understanding of how FinTech specifically enhances financial inclusion among MSMEs, particularly in developing economies. Moreover, the interaction between FinTech adoption and enabling factors such as literacy, institutional quality, and regulatory environment remains underexplored.3
Therefore, this study aims to provide a comprehensive systematic review of the role of FinTech in enhancing financial inclusion among MSMEs in developing economies. It synthesises existing literature to identify key opportunities, structural barriers, and policy directions for improving inclusive digital financial ecosystems.
To address the identified research gap, this study is guided by the following research objectives:
RO1: To examine the role of FinTech in enhancing financial inclusion among MSMEs in developing economies.
RO2: To identify the key technological, human, and institutional factors influencing the effectiveness of FinTech-driven financial inclusion.
RO3: To synthesise the existing literature and develop an integrated socio-technical framework explaining the relationship between FinTech adoption and financial inclusion.
Accordingly, the study seeks to answer the following research questions:
RQ1: How does FinTech contribute to financial inclusion among MSMEs in developing economies?
RQ2: What are the main factors that facilitate or constrain the effectiveness of FinTech-driven financial inclusion?
RQ3: How can the relationship between FinTech adoption and financial inclusion be conceptually explained through an integrated socio-technical perspective?
2. METHODOLOGY
2.1. Research design
This study adopts a systematic literature review (SLR) approach to synthesise existing research on the role of FinTech in enhancing financial inclusion among MSMEs in developing economies. A systematic approach ensures methodological rigor, transparency, and replicability in the selection and analysis of relevant studies.3 To strengthen the transparency and reproducibility of the review process, the study was guided by the Preferred Reporting Items for Systematic Reviews and Meta-Analyses (PRISMA) framework.13 The review followed four stages: identification, screening, eligibility assessment, and final inclusion of studies. Predefined inclusion and exclusion criteria were applied to ensure consistency and minimise selection bias throughout the review process.
2.2. Data sources and search strategy
The literature was collected from major academic databases, including Scopus, Web of Science, Google Scholar, and SSRN. The search strategy used combinations of keywords such as “FinTech”, “financial inclusion”, “MSMEs”, “digital finance”, “mobile money”, and “developing countries.”7,14
2.2.1. Inclusion and exclusion criteria
The selection of studies followed predefined criteria:
Inclusion criteria:
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Peer-reviewed journal articles
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Studies published between 2010 and 2025
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Focus on FinTech, financial inclusion, and MSMEs
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Studies conducted in developing or emerging economies
Exclusion criteria:
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Non-academic sources
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Irrelevant studies
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Duplicates
2.3. Study selection process
The literature search across Scopus, Web of Science, Google Scholar, SSRN, and Elicit generated a broad pool of potentially relevant studies on FinTech and financial inclusion. The study selection process followed a structured screening procedure.
First, duplicate records retrieved from multiple databases were removed. Second, titles and abstracts were screened to assess their relevance to the objectives of this review. Studies that did not explicitly address the relationship between FinTech and financial inclusion, did not focus on MSMEs, or were conducted outside the context of developing and emerging economies were excluded.
Third, full-text articles were assessed to evaluate their conceptual relevance, methodological quality, and contribution to the research objectives. Additional studies were excluded when they provided overlapping evidence, lacked sufficient empirical or theoretical contribution, or focused on topics outside the scope of this review.
Following this multi-stage screening process, 25 studies were retained for the final thematic analysis. The final sample represents the most relevant and methodologically appropriate studies for examining the role of FinTech in enhancing financial inclusion among MSMEs in developing economies.
Although the initial search produced a considerably larger number of potentially relevant studies, only 25 studies were retained for the final review. This was not due to limitations in the availability of literature, but rather the application of strict inclusion and exclusion criteria designed to ensure relevance, quality, and consistency. The review specifically focused on studies addressing the relationship between FinTech and financial inclusion among MSMEs in developing and emerging economies. Consequently, studies with a broader focus on digital finance, financial technology without inclusion outcomes, or financial inclusion without a FinTech dimension were excluded. This targeted selection strategy helped reduce conceptual heterogeneity and enhance the analytical depth of the review.
2.4. Data analysis method
The selected studies were analysed using a thematic analysis approach following the principles proposed by Braun and Clarke.15 The analysis involved a systematic process of data extraction, coding, theme identification, and synthesis. First, key information related to FinTech adoption, financial inclusion outcomes, barriers, enabling factors, and policy implications was extracted from each study. Second, recurring concepts and findings were coded and compared across the selected studies. Third, similar codes were grouped into broader thematic categories based on conceptual similarities and patterns observed in the literature. Finally, the identified themes were synthesised to develop an integrated understanding of the mechanisms through which FinTech contributes to financial inclusion among MSMEs in developing economies.
This process resulted in four major themes: (1) FinTech innovations enabling financial inclusion, (2) MSME access to financial services, (3) structural and systemic barriers, and (4) policy and regulatory implications. The thematic synthesis provided the foundation for the development of the proposed socio-technical framework.
2.5. Literature review and thematic analysis
2.5.1. FinTech as a structural enabler of financial inclusion
Financial technology (FinTech) has fundamentally reshaped the structure of financial systems in developing economies, positioning itself as a key enabler of financial inclusion. The literature consistently demonstrates that FinTech reduces structural inefficiencies associated with traditional banking systems by lowering transaction costs, improving service delivery speed, and expanding geographical outreach.1,5,8
This finding is consistent with previous systematic reviews that identify FinTech lending as a key mechanism for expanding financial inclusion and improving access to credit among underserved populations.9
In particular, innovations such as mobile banking, digital wallets, and peer-to-peer lending platforms have emerged as dominant tools for extending financial services to underserved populations. Empirical studies indicate that MSMEs benefit significantly from these innovations through improved access to credit, enhanced liquidity management, and reduced reliance on informal financial channels.12,16
These developments are especially relevant in environments where traditional financial infrastructure is either weak or inaccessible. By reducing dependence on physical banking systems, FinTech enables broader participation in formal financial ecosystems.
However, a comparative analysis of the literature reveals an important divergence. While some studies argue that FinTech directly contributes to poverty reduction and financial empowerment,2,4 others highlight that these benefits are unevenly distributed across socio-economic groups and regions.3,17 This suggests that FinTech should be understood as an enabling infrastructure rather than a standalone solution for financial inclusion. This perspective is supported by critical studies that question whether FinTech can be considered a universal solution to poverty and financial exclusion, emphasising the importance of contextual and institutional constraints.18
Furthermore, the literature indicates that FinTech adoption is strongly correlated with broader macroeconomic conditions, including digital ecosystem maturity and institutional readiness.8,19 Countries with more advanced digital ecosystems tend to achieve higher levels of financial inclusion, while structurally constrained economies experience more limited outcomes.
2.5.2. Digital and financial literacy as core mediating mechanisms
One of the most consistent findings in the literature is the critical role of digital and financial literacy in shaping the effectiveness of FinTech adoption. Although access to FinTech platforms has expanded rapidly, actual usage remains uneven due to significant capability gaps. Digital literacy acts as a key mediating factor between access and effective utilisation of financial technologies. Individuals with higher levels of digital competence are better equipped to navigate platforms, evaluate financial products, and manage digital transactions efficiently.20
Conversely, low levels of literacy often lead to underutilisation, misuse, or complete exclusion from digital financial services.21 This creates a situation where access exists, but meaningful financial inclusion does not materialise.
Financial literacy complements digital skills by enabling users to make informed decisions regarding borrowing, saving, and financial planning. The literature also highlights disparities across gender and geographic dimensions, with women and rural populations disproportionately affected by literacy gaps.7
A key conceptual insight emerging from this literature is that FinTech without adequate literacy leads to access without empowerment, limiting the developmental impact of digital financial systems.
2.5.3. Infrastructure and the structural digital divide
Beyond individual capabilities, structural constraints—particularly digital infrastructure—play a decisive role in determining the effectiveness of FinTech in promoting financial inclusion.
The literature consistently identifies the digital divide as a major barrier in developing economies. Limited internet connectivity, low smartphone penetration, and unreliable electricity supply significantly constrain the scalability and reliability of FinTech solutions.3,22
Even in contexts where FinTech services are technically available, infrastructural limitations reduce usage consistency and undermine user trust in digital systems. Evidence from rural banking systems further suggests that FinTech can significantly improve financial access when supported by adequate infrastructure and institutional capacity.23 Comparative evidence shows that countries with stronger digital infrastructure achieve higher FinTech adoption rates and deeper financial inclusion outcomes, while those with weak infrastructure remain excluded despite technological availability.8
Rural–urban disparities further intensify these challenges. Rural populations often face multiple constraints related to connectivity, affordability, and service accessibility, reinforcing existing socio-economic inequalities. These findings confirm that digital infrastructure is not a complementary factor but a foundational prerequisite for inclusive digital financial ecosystems.
2.5.4. Institutional and regulatory determinants
Regulatory frameworks play a central and complex role in shaping FinTech-driven financial inclusion, acting both as enablers and constraints.
On one hand, supportive regulatory environments facilitate innovation, enhance trust, and promote adoption. Policies such as regulatory sandboxes, digital identity systems, and open banking frameworks contribute to the development of dynamic FinTech ecosystems by reducing uncertainty and encouraging innovation.7,8
On the other hand, weak or fragmented regulatory systems introduce significant risks, including cybersecurity threats, data privacy violations, fraud, and lack of consumer protection.5,24 These risks can undermine user confidence and slow down adoption processes.
The literature suggests that optimal outcomes are achieved in balanced regulatory environments, where innovation is encouraged but effectively supervised. This balance is particularly important in emerging economies where institutional capacity varies significantly.
2.5.5. Emerging technologies and financial system transformation
Recent studies highlight the growing role of emerging technologies, particularly artificial intelligence (AI), blockchain, and big data analytics—in transforming financial inclusion mechanisms.
AI-based credit scoring enables financial institutions to assess creditworthiness using alternative data sources such as transaction histories and behavioural patterns. This significantly expands access to credit for MSMEs that lack formal financial records.16
Blockchain technology contributes to increased transparency, reduced transaction costs, and enhanced security in financial transactions.5 It also facilitates decentralised financial systems that reduce reliance on traditional intermediaries.
However, these technologies also introduce new challenges. Issues such as algorithmic bias, ethical concerns, and lack of regulatory clarity remain unresolved. The literature emphasises that technological advancement must be accompanied by strong governance frameworks to ensure equitable outcomes.
2.6. From literature synthesis toward research gaps and conceptual framework
To integrate and consolidate the findings from the reviewed literature, this section presents a structured synthesis that highlights the convergence and divergence of evidence on the role of FinTech in financial inclusion, as well as the structural conditions shaping its effectiveness. This synthesis provides a critical analytical bridge between the thematic literature review and the development of the conceptual framework, allowing for a more coherent understanding of how FinTech translates into inclusive financial outcomes.
2.6.1 Thematic synthesis of literature
The reviewed literature demonstrates a strong consensus that financial technology (FinTech) plays a significant role in enhancing financial inclusion in developing economies by reducing transaction costs, improving accessibility, and expanding the reach of formal financial services.1,5,8 Empirical studies consistently identify mobile banking, digital wallets, and digital lending platforms as key enablers of financial access, particularly for MSMEs that remain structurally excluded from traditional financial systems.12,16 These findings are consistent with previous literature reviews that identify FinTech as a major catalyst for financial inclusion while highlighting the importance of contextual enabling factors.25 This is particularly evident in how FinTech-enabled microfinance drives SME resilience.26
Despite this convergence, the literature reveals important contextual heterogeneity in outcomes. Some studies report direct links between FinTech adoption, poverty reduction, and financial empowerment,2,4 while others emphasise that these effects are conditional and vary significantly across institutional environments, infrastructure quality, and user capabilities,3,17 This indicates that FinTech functions as an enabling infrastructure rather than a uniform mechanism of inclusion.
Comparative evidence further highlights that economies with more developed digital ecosystems achieve higher levels of financial inclusion, while those with weak infrastructure and limited institutional readiness experience constrained outcomes.8,19 This reinforces the systemic nature of FinTech effectiveness, which depends on broader socio-technical conditions rather than technological diffusion alone.
The synthesis presented in Table 1 indicates that FinTech-driven financial inclusion operates as a multi-layered system rather than a linear technological effect. The convergence across studies confirms that FinTech enhances access and efficiency in financial service delivery.1,5,12 However, divergence across contexts highlights that inclusion outcomes are not automatically generated but are shaped by structural and behavioural conditions.3,17
| Dimension | Converging evidence | Diverging evidence | Structural interpretation |
|---|---|---|---|
| FinTech role | Consistently improves access, transaction efficiency, and financial reach in underserved markets1,5,12 | Benefits are uneven across socio-economic groups and regions, with limited inclusion depth in some contexts3,17 | Acts as an enabling infrastructure layer rather than a standalone equaliser of financial inclusion |
| Literacy | Digital and financial literacy are essential for effective adoption and meaningful usage of FinTech services20 | Low literacy levels significantly reduce adoption quality and lead to underutilisation or misuse of services21 | Represents a human capability bottleneck shaping the effectiveness of digital finance |
| Infrastructure | Strong digital infrastructure significantly enhances scalability and adoption of FinTech solutions8,19 | Persistent digital divide, especially in rural and low-income regions, limits access and reliability22 | Functions as a structural precondition for inclusive FinTech ecosystems |
| Regulation | Supportive regulatory frameworks (e.g., sandboxes, digital ID systems) accelerate FinTech adoption and trust7,8 | Weak or fragmented governance increases risks such as fraud, privacy violations, and low trust24 | Reflects an institutional duality between innovation facilitation and risk containment |
| Technology | Emerging technologies (AI, blockchain, big data) expand financial access and improve credit inclusion22 | Concerns over algorithmic bias, ethical risks, and unequal technological access persist | Represents an innovation–equity trade-off in digital financial systems |
Within this system, human capabilities emerge as a critical determinant. Digital and financial literacy define the extent to which access to FinTech translates into meaningful usage and empowerment.20 In low-literacy environments, FinTech adoption tends to remain partial, limiting its developmental impact and reinforcing usage inequalities.21
Similarly, digital infrastructure constitutes a foundational layer of financial inclusion systems. Connectivity, mobile penetration, and digital readiness determine the scalability and reliability of FinTech services,8,19 while persistent infrastructural gaps continue to exclude rural and low-income populations.22
At the institutional level, regulation plays a balancing role between innovation and risk control. While enabling frameworks such as digital identity systems and regulatory sandboxes accelerate adoption and trust,7,8 weak governance structures introduce systemic risks including fraud and loss of confidence.24
Finally, emerging technologies such as artificial intelligence, blockchain, and data-driven credit systems extend financial inclusion by reducing informational asymmetries and enabling alternative credit assessment models.22 However, they simultaneously introduce new risks related to bias, inequality, and unequal access to technological capabilities.
2.6.2. Research gaps
Despite the growing body of literature on FinTech and financial inclusion, several important gaps remain unaddressed. Recent bibliometric evidence also confirms the rapid expansion of academic interest in FinTech and financial inclusion, while revealing fragmentation across themes, regions, and methodological approaches.27 First, most existing studies adopt a fragmented analytical perspective by examining FinTech, literacy, infrastructure, or regulation in isolation, rather than integrating these dimensions into a unified explanatory framework.
Second, the majority of empirical research focuses on access to financial services rather than long-term financial outcomes such as financial resilience, sustainability, and the risks of over-indebtedness associated with digital credit systems.24 This limits the understanding of the broader socio-economic consequences of FinTech adoption.
Third, there is a lack of comprehensive theoretical models that explain the interaction between technological, institutional, and human factors in shaping inclusive financial systems in developing economies. This fragmentation creates a need for an integrated framework that captures the dynamic interdependencies between these variables.
2.6.3. Toward the conceptual framework
Building on the synthesised literature and the identified research gaps, it becomes evident that financial inclusion in the FinTech era is not a linear outcome of technological diffusion, but rather a multidimensional and context-dependent process shaped by the interaction of technological, human, and institutional factors.
Accordingly, this study conceptualises FinTech adoption as the core enabling mechanism of financial inclusion. However, its effectiveness is not inherent, but conditioned by three interdependent dimensions:
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Digital and financial literacy mediating human capabilities that determine the ability of users to effectively understand, adopt, and utilise digital financial services.
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Digital infrastructure as a structural enabler that determines accessibility, reliability, and scalability of FinTech solutions across regions.
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Regulatory frameworks as institutional moderators that shape trust, consumer protection, market stability, and the balance between innovation and risk control.
Within this analytical structure, financial inclusion is conceptualised as a multidimensional outcome emerging from the dynamic interaction between technology, institutional environments, and human capabilities rather than from FinTech adoption alone.
This integrated perspective addresses the fragmentation observed in the existing literature, where technological, institutional, and behavioural determinants are often examined in isolation. By synthesising these dimensions into unified analytical logic, this study provides a coherent foundation for the development of a comprehensive conceptual framework for FinTech-driven financial inclusion in developing economies.
3. CONCEPTUAL FRAMEWORK
Building on the synthesis of the literature presented in the previous section, this study proposes a conceptual framework that explains the mechanisms through which financial technology (FinTech) contributes to financial inclusion among MSMEs in developing economies.
Unlike linear models that consider financial inclusion as a direct outcome of technological adoption, this framework adopts a socio-technical perspective, in which financial inclusion is understood as an emergent outcome resulting from the interaction between technological systems, human capabilities, and institutional environments.
The proposed framework is grounded in a socio-technical perspective, which emphasises that technological outcomes are shaped by the interaction between technological systems, human capabilities, and institutional environments. In the context of FinTech-driven financial inclusion, this perspective suggests that access to digital financial services alone is insufficient to generate inclusive outcomes unless supported by adequate user capabilities and enabling institutional conditions.
The framework is further informed by the Technology Acceptance Model (TAM),28 which highlights the importance of users’ ability and willingness to adopt technological innovations, and by Human Capital Theory,29 which emphasises the role of knowledge, skills, and financial literacy in enhancing the effective utilisation of financial resources and technologies. Together, these perspectives provide a theoretical foundation for understanding how FinTech adoption translates into financial inclusion among MSMEs in developing economies.
The socio-technical perspective provides an appropriate lens for understanding FinTech-driven financial inclusion because it recognises that technological innovations do not operate in isolation. Instead, outcomes emerge from the interaction between technological systems, human actors, and institutional environments.
From a technological perspective, FinTech innovations such as mobile banking, digital payments, artificial intelligence-based credit scoring, and digital lending platforms increase accessibility and reduce transaction costs. However, the effectiveness of these technologies depends on users’ ability to understand and utilise them effectively.
This human dimension is reflected in Human Capital Theory, which emphasises the importance of knowledge, skills, and competencies. Within the proposed framework, digital and financial literacy represent critical forms of human capital that enable MSMEs to benefit from digital financial services.
The TAM further explains the adoption of FinTech technologies by highlighting the importance of perceived usefulness and ease of use. MSMEs are more likely to adopt FinTech solutions when they perceive them as beneficial, accessible, and easy to integrate into business operations.
Finally, institutional factors such as digital infrastructure and regulatory frameworks shape the broader environment within which FinTech operates. Reliable infrastructure facilitates access and scalability, while supportive regulations enhance trust, consumer protection, and innovation. Consequently, financial inclusion is conceptualised as the result of interactions among technological capabilities, human capital, and institutional conditions rather than technological adoption alone.
Figure 1 presents the proposed conceptual framework illustrating the relationships between FinTech adoption, enabling conditions, and financial inclusion outcomes.
Source: Authors’ own compilation based on the reviewed literature.
As illustrated in Figure 1, FinTech adoption is positioned as the core enabling mechanism that facilitates access to financial services by reducing traditional barriers such as cost, distance, and information asymmetry.
However, the effectiveness of FinTech is contingent upon three interdependent dimensions:
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1.
Digital and Financial Literacy (Mediator)
Digital and financial literacy represent critical human capabilities that determine the extent to which MSMEs can effectively understand, adopt, and utilise digital financial services. Without adequate literacy, access to FinTech remains superficial and fails to translate into meaningful financial inclusion.20,21
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2.
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3.
Conceptual contribution:
This framework contributes to the literature by:
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Moving beyond technology-centric explanations
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Integrating fragmented determinants into a unified model
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Explaining why FinTech works in some contexts and fails in others
Thus, financial inclusion is conceptualised as a multidimensional outcome emerging from the interaction of technology, institutions, and human capabilities.
4. DISCUSSION
The findings of this study provide important insights into the role of FinTech in advancing financial inclusion in developing economies. A key conclusion emerging from the literature is that FinTech significantly improves access to financial services by reducing transaction costs, enhancing efficiency, and overcoming geographical barriers.1,5,8 However, this relationship is neither uniform nor automatic.
The analysis confirms that FinTech should not be interpreted as a standalone driver of financial inclusion, but rather as an enabling infrastructure whose effectiveness depends on contextual conditions.
One of the most critical insights concerns the mediating role of digital and financial literacy. Although FinTech platforms are increasingly available, their impact is constrained by users’ capabilities to effectively utilise them. Without adequate literacy, access does not translate into meaningful financial participation, leading to partial or superficial inclusion.20,21
In parallel, digital infrastructure emerges as a structural determinant of FinTech effectiveness. Differences in connectivity and technological readiness explain significant variations in financial inclusion outcomes across countries and regions.8,19 In contexts where infrastructure is weak, FinTech adoption remains limited and fragmented, reinforcing rather than reducing inequalities.
At the institutional level, regulatory frameworks play a dual role. Supportive environments foster innovation and trust, while weak governance increases exposure to risks such as fraud and cybersecurity threats.7,24 This duality highlights the importance of balanced regulatory approaches that encourage innovation while ensuring consumer protection.
When interpreted through the proposed conceptual framework, these findings demonstrate that financial inclusion is not a direct outcome of FinTech diffusion, but a systemic process shaped by the interaction of multiple enabling conditions.
Importantly, this study contributes to ongoing debates by showing that while FinTech expands access, its broader developmental impact depends on the alignment between technology, infrastructure, and human capabilities.5,12
An important contribution of this review lies in its ability to integrate findings that have largely been examined separately in previous studies. While individual studies typically focus on specific countries, technologies, or determinants of financial inclusion, the present review reveals a broader and more consistent pattern across developing economies. The synthesis demonstrates that FinTech does not automatically generate financial inclusion; rather, its effectiveness depends on the alignment of technological capabilities, human capital, and institutional conditions.
This collective evidence suggests that financial inclusion should be understood as a socio-technical outcome rather than a purely technological one. Across the reviewed studies, digital and financial literacy, infrastructure quality, and regulatory support repeatedly emerged as critical enabling conditions. The review therefore provides a more comprehensive explanation of why FinTech adoption produces different outcomes across contexts, helping to reconcile findings that appear inconsistent when examined individually.
By bringing together evidence from multiple settings and perspectives, this study advances the literature beyond isolated empirical findings and offers an integrated framework for understanding FinTech-driven financial inclusion among MSMEs in developing economies.
4.1. Limitations and future research
This study is subject to several limitations.
First, it relies exclusively on secondary data derived from existing literature, which may limit the generalisability of findings. Second, the analysis focuses primarily on developing economies, which may not fully capture dynamics in advanced financial systems.
Future research should focus on:
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Empirical testing of the proposed conceptual framework
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Long-term impacts of FinTech on financial resilience
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Risks associated with digital credit and over-indebtedness
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Comparative studies across regions
5. CONCLUSION
This systematic literature review provides a comprehensive synthesis of the evidence on the relationship between FinTech and financial inclusion among MSMEs in developing economies. Beyond confirming the positive role of FinTech in expanding access to financial services, the review establishes that financial inclusion cannot be explained by technological adoption alone.
The collective evidence demonstrates that the effectiveness of FinTech depends on the interaction between technological innovations, human capabilities, and institutional conditions. Digital and financial literacy, digital infrastructure, and regulatory support consistently emerged as critical determinants shaping financial inclusion outcomes across different contexts.
A key contribution of this review is the development of an integrated socio-technical framework that brings together fragmented findings from the existing literature into a coherent explanatory structure. The framework helps explain why FinTech generates positive inclusion outcomes in some contexts while producing more limited effects in others.
Overall, the review advances current understanding by conceptualising financial inclusion as a multidimensional and context-dependent outcome that emerges from the alignment of technology, human capital, and institutional environments. This perspective provides a stronger foundation for future empirical research and policy development in the field of digital financial inclusion.
5.1. Policy implications
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Strengthening digital and financial literacy
The review consistently identified digital and financial literacy as one of the most important determinants of effective FinTech adoption. Therefore, governments and development agencies should invest in targeted literacy programs for MSMEs to improve their ability to utilise digital financial services and make informed financial decisions.
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Investing in digital infrastructure
The findings revealed that inadequate connectivity, limited digital access, and infrastructure gaps remain major barriers to financial inclusion in many developing economies. Investments in broadband connectivity, mobile networks, and digital infrastructure are therefore essential to ensure broader and more equitable access to FinTech services.
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Developing adaptive regulatory frameworks
The reviewed studies highlighted the importance of supportive yet balanced regulatory environments. Policymakers should encourage innovation through regulatory sandboxes and digital finance initiatives while simultaneously strengthening consumer protection, cybersecurity, and data privacy mechanisms.
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Promoting MSME-oriented FinTech solutions
The review found that alternative credit scoring systems, digital lending platforms, and mobile financial services significantly improve MSMEs’ access to finance. Policymakers and financial institutions should therefore support the development and scaling of FinTech solutions specifically designed to address MSME financing constraints.
Acknowledgment
The author would like to acknowledge the valuable feedback and constructive insights received during the development of this research, which contributed to improving the quality and clarity of the manuscript.
Ethical approval
Institutional Review Board approval is not required.
Declaration of patient consent
Patient’s consent is not required as there are no patients in this study.
Financial support and sponsorship
Nil.
Conflicts of interest
There are no conflicts of interest.
Use of artificial intelligence (AI)-assisted technology for manuscript preparation
The authors confirm that there was no use of artificial intelligence (AI)-assisted technology for assisting in the writing or editing of the manuscript and no images were manipulated using AI.
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