Digital Finance for SMEs and Startups: Literature Review and Research Proposals

Financial digitalisation represents a systemic transformation that affects the entire business lifecycle, emphasising trust, transparency, sustainability, and innovation. Digital tools and platforms, such as crowdfunding and online peer-to-peer lending, increase access to credit and mitigate entry barriers, particularly for startups and small and medium sized enterprises. New technologies, including blockchain and big data, reduce information asymmetries, improve risk assessment, and strengthen stakeholder trust. The transparency of these platforms, associated with the use of reputational signals (for instance credit ratings and reviews), plays a pivotal role in attracting investors and optimizing capital allocation. The democratisation of access to finance supports innovative business models that are not just profit-driven but also oriented towards social and environmental value. In this context, our research aims to systematically conceptualise digital finance tools, their specific benefits and challenges. The integration of advanced digital technologies into financial services allows greater access to lending resources and innovative funding models. Moreover, several issues and trends emerge, such as, the regulatory uncertainty, the data quality for privacy and cybersecurity, increasing use of AI to customise financial services and risk assessment. Specifically, our study presents a detailed analysis of the state of the art on the connections between digital finance and entrepreneurship, focusing on credit rating in the digital context. In addition, it also provides propositions through which firms can gain competitive advantage and highlights the democratization of credit and financial inclusion, made possible by reducing geographical and socio-economic barriers. Several implications emerge from a managerial point of view and from a theoretical perspective.