Digital financial infrastructure and SME credit access: Systemic evidence across financial inclusion and economic growth channels

Abstract

Digital financial infrastructure serves as a key structural correlate of small and medium enterprise (SME) credit availability and systemic financial development across post-Soviet transition economies. This study evaluates the empirical associations between technological connectivity, institutional policy readiness – specifically Digital ID and ISO 20022 standardization – and SME credit access (CreditLine) as the primary outcome of interest, alongside auxiliary supporting analyses of population-level financial inclusion (Ic_Y_norm) and macroeconomic output (lnGDPperCapita). Utilizing a panel dataset for 14 post-Soviet countries from 2011 to 2023 (N = 182) sourced from the World Bank WDI, Global Findex, and official central bank reports, the empirical framework relies on One-Way Country Fixed Effects (FE) specifications with Driscoll–Kraay robust standard errors to account for spatial and temporal dependence, supplemented by a Two-Way Fixed Effects (TWFE) sensitivity analysis. Mobile connectivity demonstrates a positive baseline association with SME credit availability, while internet penetration is identified as a primary empirical correlate of populationlevel financial inclusion across specifications. The protection of legal rights correlates with enhanced SME credit access, whereas strict AML/CFT compliance shows a strong negative association. Institutional messaging standardization via ISO 20022 exhibits heterogeneous structural differential associations: while positively correlating with SME credit access, it reflects a statistically significant negative association with broader population inclusion. Robustness estimations indicate that exogenous regional shocks (COVID-19, geopolitical conflicts, and energy crises) and macroeconomic slack (inflation, unemployment) correspond to systemic contractions in credit availability.