Building investor confidence: overcoming credit rating limitations SME financing in Bangladesh in the fintech era

Abstract

The internship report seeks to discuss how credit evaluation models using Fintech can meet the shortcomings of traditional credit ratings to the Small and Medium Enterprises (SMEs) in Bangladesh. Conventional credit scoring processes can be inaccurate in characterizing risk of SMEs thus limiting access to finance and investors losing interest due to these factors. This paper explores how new Fintech technology can support the promise of more complete and accurate credit decision-making by adding additional data sources to the equation. This study has concentrated on surveying the following stakeholders in the sector such as investors, Fintech operators and the owners of SMEs to see their opinions on the incorporation of non-conventional information into the system of credit scoring. Based on Fintech case studies and the applicable literature, the paper suggests that by utilizing these technologies it is possible to enhance the process of assessing the credit worthiness and the confidence of investors. Finally, the report aims to provide quality research knowledge to fill the financing gap of the SMEs in Bangladesh, bring them financial inclusion and economic sustainability by providing better credit evaluation techniques.