Fintech’s Role in Empowering SMEs Financing with a Focus on Mauritania

Small and medium enterprises (SMEs) stand out as vital catalysts for economic growth globally, spearheading job creation, social progress, and innovation. Ninety-five percent (95%) of the job's providers are in Africa (World Trade Organisation, 2022). However, SMEs frequently encounter significant obstacles, foremost among them being limited access to finance, particularly pronounced in the aftermath of financial crises. Traditional banking institutions, constrained by regulatory shifts, have curtailed lending to SMEs, ushering in the rise of Financial Technology (Fintech) firms offering innovative financing solutions. Fintech platforms, leveraging state-of-the-art technology and diverse business models, present SMEs with alternative avenues for financing, including debt and equity financing. This disruption in the financial landscape holds promise for SMEs, offering them an escape from reliance on conventional banking channels and access to the capital essential for growth and expansion. SMEs can contribute significantly toward attainment of several Sustainable Development Goals (SDGs) such as employment generation, income disparity reduction, and poverty alleviation, among others (OECD, 2017). Beyond stifling traditional financing avenues, the post-crisis era has witnessed the emergence of new financing alternatives. These non-bank financing options have empowered SMEs by offering fresh avenues for funding. While Fintech companies are experiencing a surge in developed nations, many developing countries still lag. Despite the manifold benefits Fintech financing offers to SMEs, certain countries are disregarding them and delaying their adoption.