Addressing the Financial Gap: Promoting Sustainable Growth in Palestinian SMEs through P2P Lending Fintech and Business Support Services

SMEs play a very crucial role in the Palestinian economy by way of generating employment and innovation. However, their long-term development and overall performance are marred by poor access to credit, especially external finance, which in most cases causes them to withdraw from the market and become less competitive. This research examines the promise of peer-to-peer (P2P) lending financial technology platforms and business support services (BSS) in closing the existing financial gap and ensuring sustainable development among Palestinian small and medium-sized enterprises (SMEs) by emphasizing the mediating effect of financial access. A deductive methodology was employed with a strong emphasis on quantitative analysis. Primary data were collected based on a non-probability sampling method, namely convenience sampling, through a questionnaire specifically prepared for this purpose. Partial Least Squares Structural Equation Modeling (PLS-SEM) was employed in the data analysis. The study targeted a heterogeneous sample of 4,374 Palestinian SMEs represented by owners, CEOs, and CFOs, with a final valid sample of 363 SMEs. The results revealed a significant mediating effect of financial access on the relationship between P2P lending, BSS, and sustainable growth. Moreover, the study recommends that Palestinian policymakers adopt P2P lending programs and business facilitation services and offer practical insights on how to utilize these instruments to enhance access to finance and promote sustainable development for SMEs in the territory.