Fintech Business Models Focus on Financing SMEs in the age of AI

Abstract

In our paper we discuss the financing situation of SMEs, by analyzing the impact of AI on the credit market for SME. We identify the financial frictions that exist, their causes, and possible solutions. In doing so, we consider the framework within all participants in the SME financial market operate, as well as specific processes on the supply and demand side and the transactional dimension. Of course, this paper must also consider the regulatory specifics that arise in particular from the use of AI in the lending process. The paper concludes with recommendations for SMEs, lenders, and regulators/policy makers.