Author(s)

Ruoyi Li

Corresponding Author

Ruoyi Li

ABSTRACT

Small and medium enterprises (SME) always have a hard time getting a loan from the bank. Especially during the covid, SMEs are seeking help due to a dramatic drop in revenues and they’re struggling to just stay afloat. On the other hand, digital finance plays an essential role during the COVID-19 and fintech companies are well-placed to deal with digital demand and work from home conditions. This paper investigates the impact of the digital finance coverage breadth on the growth of small and medium enterprises (SME). Using data of Chinese SMEs and corresponding coverage breadth index for the period 2011 to 2018, our results find (1) there is a significant positive correlation between coverage breadth and growth; (2) there is no heterogeneity in the impact of digital finance on the growth of enterprises in which their assets are above the mean and below the mean. The findings shed light on presenting that digital finance boosts the growth of SMEs as an effective complement to existing conventional financial services.

KEYWORDS

Coverage breadth, digital finance, growth, SME