Analysis of Fintech Adoption and Its Influence on MSME Sustainability Outcomes: A Case Study from Bangalore (Acta Innovations)

Summary

• The study surveyed 535 MSMEs in Karnataka using a structured questionnaire covering six fintech dimensions.p.1
• Fintech use has a large and positive effect on MSME sustainability, with digital payments, investment tools and banking technologies the most impactful dimensions.p.1
• The first principal component explained 47.094% of the total variance, and the six extracted components explained 71.874%.p.5
• Structural equation modelling shows a positive link of 0.544 (p < 0.001) between fintech usage and business sustainability.p.8
• Service-industry firms were the largest group in the sample, with 202 respondents (37.8%).p.4
• Model fit: chi-square of 1290.098 with 200 degrees of freedom, CMIN/DF of 2.698 and RMSEA of 0.031.p.7

Key insights

1. Fintech adoption is found to enhance financial access and operational efficiency of MSMEs in Karnataka.p.1
2. The survey covered 535 MSME respondents across six fintech dimensions: credit, payments, investment, personal finance management, banktech and insurtech.p.1
3. Payments is the largest factor by item count, with 7 of the 23 items loaded.p.6
4. The first principal component explained 47.094% of total variance, derived from an eigenvalue of 10.832.p.5
5. Six components together explained 71.874% of total variance, indicating a robust factor structure.p.5
6. The SEM estimate for the effect of fintech usage on business sustainability is 0.544 (p < 0.001).p.8
7. The sample is mostly service-based, with 202 respondents (37.8%) in services and 143 respondents (26.7%) in hybrid businesses.p.4