Research on the Impact of Financial Innovation in Marginalized Regions on the Economic Development of Small and Medium Enterprises

This study examines how financial innovation influences the economic growth of small and medium-sized enterprises (SMEs) located in marginal areas. It delves into the interactive dynamics and mechanisms between these various elements. SMEs in marginal regions encounter obstacles, including financing difficulties and short lifespan, stemming from economic stagnation, financial exclusion, and insufficient infrastructure. Financial innovation goes beyond the confines of conventional financial services, appearing in forms like digital inclusive finance, fintech, and supply chain finance. It helps ease the financial constraints faced by SMEs, lowers transaction expenses, and promotes technology dissemination. Evidence shows that financial innovation improves access to credit, alleviates information asymmetry, fosters SMEs' digital transformation, and unlocks the potential for financing intellectual property. To enhance financing avenues and refine financial policies, collaboration between governments and markets is essential. Banks need to reconsider their traditional views on SMEs and judiciously implement credit technologies to maximize the potential of financial innovation in propelling the economic progress of SMEs in peripheral regions. This strategy will aid in shifting the regional economy from merely a 'peripheral receiving station' to a 'specialized transfer hub.' The emphasis of inclusive financial services should be on advancing the growth of small and medium-sized banking institutions in nearby areas, while also reinforcing financial regulation and enforcement to encourage the development of non-standard financing channels. By implementing targeted policies, the significant issues of financing difficulties and elevated costs experienced by small, medium, and micro enterprises can be addressed.