Empirical Study on the Impact of Digital Finance on Commercial Credit Allocation in SMEs

Against the backdrop of rapid digital finance development, the effective allocation of commercial credit to small and medium enterprises (SMEs) has become a crucial issue in China's economic growth. This study, based on data from Chinese listed SMEs from 2011 to 2021, examines the impact of digital finance development on the allocation of commercial credit to SMEs and its mechanisms. The findings indicate that digital finance significantly reduces both the demand for commercial credit financing and the supply of commercial credit to SMEs, a conclusion that holds even after robustness tests. Mechanism tests confirm that digital finance achieves this by easing financing constraints and reducing information asymmetry. Furthermore, digital finance exerts a heterogeneous impact on SMEs of different types and regions, leading to several pertinent recommendations.