Fintech Innovations in Assessing SME Creditworthiness in Bahrain

Access to finance is a critical determinant of success for small and medium-sized enterprises (SMEs). According to the Bahrain Economic Development Board, SMEs in the Kingdom of Bahrain faced significant challenges in securing necessary financial resources as of 2008. This paper proposes integrating a real-time alternative data credit scoring API with existing credit report services. By utilizing machine learning for credit scoring, this solution enables financial institutions and Export Bahrain to make informed lending decisions and efficiently handle risks. By incorporating machine learning for credit scoring, this solution helps the financial institutions and Export Bahrain make informed decisions on lending while mitigating risks effectively. A mixed-method approach, surveys, and interviews were used in the study, with a sample of 63 SME owners participating in the survey. The proposed solution aims to bridge the gap in the financing of SMEs by applying alternative data sources for real-time credit scoring, enabling SMEs to access more reliable financial services. This, in turn, is expected to foster their growth and increase their contribution to the overall economic well-being of the region.