Financial inclusion (FI) is perceived as an imperative tool for reducing poverty and stimulating economic growth. In particular, FI provides access to capital and financial services to small and medium-sized enterprises (SMEs) and enables them to manage their finances, mitigate risks, expand operations, facilitate innovation, and drive job creation. SMEs are considered the backbone of an economy regardless of the level of development of that economy. However, their potential is not fully tapped yet and is hindered due to several constraints. Among its constraints, the unavailability of financial resources is considered a major barrier to SME growth. The International Finance Corporation (IFC) evidenced that 40% of formal SMEs in emerging economies suffer from unmet yearly financial needs of USD 5.2 trillion. Despite all the advantages of FI, it is argued that FI is contingent upon various factors such as structural and policy-related factors and cannot be achieved in isolation. The effectiveness of FI requires collective effort. On the other hand, information and communication technology (ICT) is considered a key enabler of FI. The existing literature has been debated the relationship between FI and SME growth; nonetheless, a lack of consensus exists for the role of FI in SMEs' performance and/or growth. It is also evidenced that the level of FI varies among countries as well as within a country. Therefore, this chapter reviews the academic literature on FI in SMEs by employing bibliometric analysis methods. A total of 62 publications related to FI in SMEs between 2206 and 2024 were identified from a widely recognised Scopus online database. Using VOSviewer software, the analysis established how research has evolved in this area. The authors identified main current themes, emerging trends, and gaps for future research directions.
Top1. Introduction
The promotion of financial inclusion has emerged as a crucial element in the advancement of worldwide economic growth, with SMEs being the main agents of innovation, employer of choice, and major contributors to GDP. SMEs' access to financial services becomes critical as they become major forces behind economic growth. Nevertheless, small businesses face particular challenges that could impede their development and long-term sustainability. Among those challenges, access to finance is considered a major barrier to their development. However, there is a lack of consensus regarding the influence of FI on SMEs growth. Some studies advocate that FI has a positive impact on SMEs (Okello, 2017). On the contrary, another argument supports the view that FI alone cannot bring improvement in SMEs, rather it requires collective efforts (Matama, 2016; Mwangi & Cheluget, 2018). In a similar vein, it is emphasized that to leverage financial resources wisely, financial literacy is important particularly in the case of SMEs which are already resources constrained (Junoh, et al., 2019). In addition, in the era of rapid evolution of technology fintech has received attention. It is argued that Fintech can increase financial inclusion of SMEs in developing economies where SMEs suffer lack of finances and lack of financial knowledge (Nugraha et al.,2022). Despite all the factors influencing FI-SME nexus, the level of FI varies in each country. The dynamics of each country is different. For instance, Islamic countries provide Islamic finance options which can increase financial inclusion of Muslims who are interested in ethical and shariah compliant financing options.
Therefore, this book chapter intends to provide a deep insight into current trends on FI-SME nexus by considering OIC and non-OIC countries dynamics. To do this, bibliometric analysis will be employed to evaluate current trends, emerging patterns, and gaps in existing literature in Organization of Islamic Cooperation (OIC) and non-OIC nations on FI-SME literature. Given the unique economic, cultural, and legal contexts of OIC member countries—where Sharia-compliant FI concepts are common—FI in SMEs is an important component. A comparative viewpoint is also provided by non-OIC countries because of their different economic and regulatory frameworks, Islamic faith-based SMEs may have limitations in accessing interest free finance.
A systematic approach to mapping and analyzing the scholarly landscape that offers insights into the works that have shaped the discourse on the financial inclusion in SMEs is provided by bibliometric analysis, a quantitative tool. This method makes it possible to identify key publications, prominent research themes, well-known authors, and important journals surrounding the main topic of FI in SMEs. This chapter intends to undertake a thorough bibliometric analysis of the body of literature in order to identify gaps in the literature, highlight emerging patterns, and establish a foundation for future research endeavors.
Through the analysis of bibliometric methods such as co-authorship networks, co-citation patterns, and co-word clusters, the study seeks to determine the intellectual structure of the academic field. Prominent authors and highly cited papers can serve as indicators of knowledge leaders who can direct future research and policymaking endeavors. Analyzing academics' and institutions' patterns of collaboration may highlight chances to support interdisciplinary and global partnerships, boosting the field's research and policymaking. In addition, this book chapter intends to add value to the book by providing updated information on the influence of various factors that can lead to sustainability of SMEs by enabling them to access finances.
Policymakers, scholars, and practitioners all benefit from understanding the trends and shifts in concentration across the academic community to address the difficulties SMEs have in accessing financial services and to develop targeted programs to improve SMEs' access to funding both of which contribute to promoting sustainable economic growth in both OIC and non-OIC nations. In addition, by offering insights into how Islamic finance principles affect FI, the research aims to shed light on the evolution of research on Sharia-compliant financial inclusion for SMEs in OIC member nations. It also seeks to make clear how various legal frameworks and financial systems affect SMEs' access to financial services in non-OIC nations.
This book chapter addresses the following research questions: