Author(s)

Rong Ye ¹, Muquan Zou ¹, Fulei He ², Xiaohui Lu ³, Haitao Duan ⁴

Affiliation(s)

¹ Postdoctoral Research Work of Fudian Bank Co. LTD, 650100, Kunming, Yunnan, China
² Smart Accounting Institute, Yunnan Vocational College of Finance and Economics, Kunming, Yunnan, China
³ Kunming Foreign Language School, Kunming, Yunnan, China
⁴ Financial Research Institute of Fudian Bank Co. LTD, 650100, Kunming, Yunnan, China

Corresponding Author

Haitao Duan

ABSTRACT

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.

KEYWORDS

Marginalized Regions; Financial Innovation; Small and Medium-sized Enterprises; Digital Inclusive Finance; Financing Constraints

CITE THIS PAPER

Rong Ye, Muquan Zou, Fulei He, Xiaohui Lu, Haitao Duan, Research on the Impact of Financial Innovation in Marginalized Regions on the Economic Development of Small and Medium Enterprises. Financial Engineering and Risk Management (2025) Vol. 8: 72-86. DOI: http://dx.doi.org/10.23977/ferm.2025.080208.

REFERENCES

[1] Yang Yongchun, Leng Bingrong, Pang Guojin. The Risk of Marginalization in Western Chinese Cities[J]. Urban Issues, 2009, (08): 11-18. 
[2] Lu Guoqi, Zhang Shuhao. The Impact of Financial Exclusion on Agricultural Green Total Factor Productivity[J]. Statistics Theory and Practice, 2024, (12): 21-26. 
[3] Ma Liyi, Che Ying, Chen Baiqiang. The Relationship Between Digital Transformation and Innovation Performance in SMEs: The Mediating Role of Dynamic Capabilities and the Moderating Role of Environmental Uncertainty[J/OL]. Journal of Beijing Institute of Technology (Social Sciences Edition), 1-14[2025-04-15]. 
[4] Lu Minfeng. First-Mover Economy and Financial Innovation: Mechanism Analysis and Path Selection[J/OL]. Guangxi Social Sciences, 1-7[2025-04-17]. 
[5] Zhang Lin, Jiang Liwen, Ding Xiaolan. Can the Development of Digital Inclusive Finance Alleviate Financial Factor Distortions? [J]. Research on Financial and Economic Issues, 2025, (04): 82-97. 
[6] Hall B H, Lerner J. The Financing of R&D and Innovation[J]. Handbook of the Economics of Innovation, 2010, (1).
[7] Tan Yanzhi, Xiao Shuwen, Jiang Ling. Technology Finance, Patient Capital, and Innovation in Technology-Based SMEs [J]. Journal of Xiamen University (Philosophy and Social Sciences Edition), 2025, 75(02): 70-84.
[8] Xiao Xiaojun, Hu Mingqi. The Spatial Spillover and Spatio-Temporal Heterogeneity Effects of Digital Finance on the Development of New Quality Productivity[J]. Contemporary Economy, 2025, 42(02): 50-61. 
[9] Scott J. A., Dunkelberg W. C. Competition for Small Firm Banking Business: Bank Actions Versus Market Structure[J]. Journal of Banking & Finance, 2010, 34(11): 2788-2800. 
[10] Liu Liya, Yu Jingjing, Yang Jinqiang, Zhu Xiaoneng. Is Competition a Double-Edged Sword for Bank Credit Structure Adjustment?  Micro Evidence from China's Interest Rate Liberalization Process[J]. Economic Research Journal, 2017, (5): 131-145. 
[11] Wang Xiaohua, Deng Xiaowen, Li Ning. FinTech, Shadow Banking, and the Financing Costs of SMEs[J]. Journal of Agrotechnical Economics, 2023, (11): 110-127. 
[12] Ren Jinghui, Li Aizhen. Research on Digital Finance Incentivizing Technological Innovation in SMEs[J]. Journal of Henan Normal University (Natural Science Edition), 2023, 51(05): 74-83.
[13] Xu Hailong, Wang Hongwei. Research on Financial Support Throughout the Life Cycle of Technology-Based Small and Medium Enterprises: An Analysis Perspective Based on Risk Characteristics[J]. Scientific Management Research, 2018, 36(03): 56-59. 
[14] Feng Beilin. Research on Precise Policies to Alleviate the Difficulties and High Costs of Enterprise Financing: Based on Investigations of Financial Institutions in Shanxi, Guangdong, and Guizhou[J]. Economic Review, 2020, (04): 110-120. 
[15] Wu Long. Venture Capital, Certification Effect, and Bank Loans for Small and Medium Enterprises[J]. Economic Management, 2019, 41(02): 172-190.

Sponsors, Associates, and Links

---

• Information Systems and Economics
  
  
• Accounting, Auditing and Finance
  
  
• Industrial Engineering and Innovation Management
  
  
• Tourism Management and Technology Economy
  
  
• Journal of Computational and Financial Econometrics
  
  
• Accounting and Corporate Management
  
  
• Social Security and Administration Management
  
  
• Population, Resources & Environmental Economics
  
  
• Statistics & Quantitative Economics
  
  
• Agricultural & Forestry Economics and Management
  
  
• Social Medicine and Health Management
  
  
• Land Resource Management
  
  
• Information, Library and Archival Science
  
  
• Journal of Human Resource Development
  
  
• Manufacturing and Service Operations Management
  
  
• Operational Research and Cybernetics