An Analytical Study on the Role of Digital Financial Services in Enhancing MSME Growth and Sustainability

Abstract

Digital financial services (DFS) have transformed the financial landscape for Micro, Small, and Medium Enterprises (MSMEs) by improving accessibility, efficiency, and financial inclusion. This study aims to analyze the impact of DFS on the growth and sustainability of MSMEs. The research examines key aspects such as digital payment systems, mobile banking, fintech solutions, and credit accessibility. Through qualitative and quantitative methods, this paper highlights the benefits, challenges, and adoption trends of DFS in MSMEs. Findings suggest that DFS significantly enhances operational efficiency, reduces transaction costs, and improves access to credit. However, barriers such as cybersecurity risks, lack of digital literacy, and regulatory challenges persist. The study concludes with recommendations for policymakers and businesses to strengthen the DFS ecosystem for sustainable MSME growth.