The Role of FinTech in Microcredit and Poverty Eradication

Abstract

This study considers the function of Fintech in microcredit and its capability for tackling poverty. This paper analyses Fintech integration with microcredit and demonstrates how enhancement of Fintech enhances access to microcredit as a tool for economic development, creation of small businesses, capacity development, and financial literacy. The research applies a quantitative methodology with a descriptive focus, targeting a sample of 300 individuals along with small business operators who have worked with microcredit institutions that adopt Fintech solutions. To gather the data, an self-developed Fragebogen which is based on a Likert scale with 5 answer points was employed, The collected data was then analysed with the help of SPSS through Regression- and Correlation analysis to examine the hypothesis. The outcomes illustrate a major positive relationship between Fintech in microcredit and ease of access to microcredit, showing that Fintech creates an easier application process, provides adaptable repayment options, better customer service, and convenient transactions. This research study shows that enhanced microcredit leads to significant improvement in economic performance, encourages establishment of small-scale enterprises and strengthens capacity development, factors that are central to the fight against poverty. The study establishes that all these factors work in harmony to ensure that the war on poverty is supported through empowering persons as well as the society, whereby everybody and every community can be empowered to achieve economic and social transformation. Policy makers, financial institutions, and development organizations can use the research's findings to increase the accessibility and efficacy of microcredit by leveraging Fintech. The study offers the following recommendations for increasing the influence of Fintech on poverty reduction: to support the policy of financial inclusion, increase the circle of patients acquainted with digital technologies, develop new types of financial services for the low-income population. The research concludes to the idea that Fintech operating in microcredit holds the key to transform interventions on poverty eradication through extending access to affordable and inclusive finance instruments for sustainable economic development. This emphasises the need to blend Fintech in development agendas intended to address poverty.