The Impact of FinTech Adoption on SME Performance: The Mediating Roles of Financial Literacy and Transparency
Abstract
The rapid adoption of financial technologies (FinTech) has transformed the way Small-Medium Enterprises (SMEs) manage operations, finances, and stakeholder relationships. However, the mechanisms through which FinTech improves SMEs' performance remain underexplored. This study investigates the impact of fintech adoption on SMEs' performance, with financial literacy and transparency examined as mediating variables. Using data collected from 300 SMEs in India and analyzed through Partial Least Squares Structural Equation Modeling (PLS-SEM), the findings reveal that FinTech adoption has a significant positive effect on SMEs' performance. Moreover, financial literacy and transparency partially mediate this relationship, underscoring their role as complementary enablers. The model explains substantial variance in SMEs' performance, confirming its predictive strength. The study contributes to theoretical literature by combining Fintech adoption, transparency, and financial literacy into a unified performance model by expanding the previous research on the Technology Acceptance Model (TAM) and SMEs' digital adoption. Practically, the findings offer SMEs, policy makers, and financial institutions insight into how to make use of digital tools and strengthen the governance and literacy frameworks. This novel integration, when tested in the Indian context, provides a rich contribution to global discourse on SMEs' competitiveness in the digital economy.
About this article
Keywords
- Fintech
- SMEs Performance
- Financial Literacy
- Transparency
- Financial Technology
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