Manuscript Number : SHISRRJ221223

Conceptual Framework for Access to Finance in SMEs Using Decentralized Digital Lending Platforms

Authors(5) :-Sandra Orobosa Ikponmwoba, Onyeka Kelvin Chima, Onyinye Jacqueline Ezeilo, Benjamin Monday Ojonugwa, Michael Olumuyiwa Adesuyi

Small and medium enterprises (SMEs), representing 90% of global businesses, face significant barriers to accessing finance, with 65% unable to secure loans due to high interest rates, collateral requirements, and bureaucratic processes. Decentralized digital lending platforms, leveraging blockchain and decentralized finance (DeFi), offer a transformative solution by enabling peer-to-peer lending, reducing intermediaries, and lowering costs. This paper proposes a conceptual framework for enhancing SME access to finance through decentralized digital lending platforms, integrating smart contracts, credit scoring algorithms, and regulatory compliance mechanisms. Employing a mixed-method approach, the study combines a literature review of 110 peer-reviewed articles and industry reports (2015–2021), framework development, and pilot testing with 20 SMEs and 5 lending platforms across Europe, North America, and Africa. The framework achieves a 40% increase in loan approval rates, reduces interest rates by 30%, and cuts processing times by 50%. Key findings highlight scalability across SMEs with 10–250 employees, affordability ($2,000–$10,000 implementation), and alignment with regulations like GDPR and AML/KYC. Challenges include technological literacy, regulatory fragmentation, and cybersecurity risks, while opportunities involve AI-driven credit scoring, stablecoin integration, and public-private partnerships. The study contributes to SME financing and DeFi literature by offering a practical, blockchain-based framework bridging financial, technological, and regulatory needs. For SMEs, it provides cost-effective access to capital; for policymakers, it offers strategies to foster financial inclusion; and for researchers, it lays a foundation for exploring DeFi scalability and SME adoption. Future directions include AI-enhanced credit models, cross-border lending, and frameworks for developing regions. By addressing these issues, this paper underscores the transformative potential of decentralized digital lending platforms in empowering SMEs for economic growth and resilience.

Authors and Affiliations

Sandra Orobosa Ikponmwoba
Independent Researcher, Abuja, Nigeria
Onyeka Kelvin Chima
Africa Capital Alliance, Ikoyi, Lagos. Nigeria
Onyinye Jacqueline Ezeilo
Independent researcher, Abuja, Nigeria
Benjamin Monday Ojonugwa
Independent researcher, Lagos, Nigeria
Michael Olumuyiwa Adesuyi
First Bank of Nigeria Ltd, Kano, Nigeria

Decentralized Finance (DeFi), SME Financing, Blockchain Lending Platforms, Smart Contracts, Financial Inclusion, AI-Driven Credit Scoring

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Publication Details

Published in : Volume 5 | Issue 2 | March-April 2022
Date of Publication : 2022-03-30
License:  This work is licensed under a Creative Commons Attribution 4.0 International License.
Page(s) : 164-174
Manuscript Number : SHISRRJ221223
Publisher : Shauryam Research Institute

ISSN : 2581-6306

Cite This Article :

Sandra Orobosa Ikponmwoba, Onyeka Kelvin Chima, Onyinye Jacqueline Ezeilo, Benjamin Monday Ojonugwa, Michael Olumuyiwa Adesuyi, "Conceptual Framework for Access to Finance in SMEs Using Decentralized Digital Lending Platforms ", Shodhshauryam, International Scientific Refereed Research Journal (SHISRRJ), ISSN : 2581-6306, Volume 5, Issue 2, pp.164-174, March-April.2022
URL : https://shisrrj.com/SHISRRJ221223

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