Fintech Adoption and Regulatory Barriers in Promoting Financial Inclusion among MSMEs: Evidence from India

Abstract

This study investigates the regulatory and behavioural challenges that Micro, Small, and Medium Enterprises (MSMEs) face in adopting financial technology (Fintech) solutions within the Guindy Thiru Vi Ka Industrial Estate of Chennai, Tamil Nadu. The research emphasizes the role of Fintech in promoting financial inclusion and explores how social media marketing influences MSME outreach and engagement. Using a structured questionnaire based on prior studies and validated through a pilot test (Cronbach’s alpha = 0.891), data were collected from 128 MSMEs through snowball sampling. The analysis was conducted using SPSS Version 21, employing both descriptive and non-parametric inferential statistical techniques, including the Kruskal-Wallis H test and the Mann-Whitney U test. Findings reveal that while MSMEs demonstrate a positive attitude, trust, and behavioural intention towards Fintech adoption, significant barriers persist—particularly in areas of awareness, digital literacy, infrastructure, and trust in technology. Regulatory complexity and high implementation costs further impede broader adoption. The study highlights that demographic factors such as age, education, and business assets significantly influence Fintech adoption, whereas gender and business type do not. The research recommends targeted interventions, policy support, and infrastructure development to enhance digital financial integration among MSMEs.