Local Bank, Digital Financial Inclusion and SME Financing Constraints: Empirical Evidence from China

This paper investigates the impact of local banks and digital financial inclusion on Small Medium-sized Enterprise (SME) financing constraints. Using data from Chinese SMEs for period 2007–2017, our robust results find that (1) SMEs’ constraints are negatively associated with proportion bank branches degree inclusion; (2) effect is more pronounced firms which small, transparent, located in regions less dependent credit; (3) have a substitution alleviating The findings shed light how finance technologies could influence traditional SME-bank relationships important policy managerial implications.