Abstract
Purpose: The recent proliferation of digital financial services in most emerging economies has led to an explosion in the digital data trail. However, the prevailing credit gap in SMEs is still a major concern. This study examines how the digital footprint of financial services is interpreted to deliver formal credit across different institutions. Drawing on institutional logics theory, we aim to identify the logics governing the use or non-use of DFS transaction data that facilitate SMEs' access to formal credit.
Methodology: We employed a qualitative lens, interviewing banks, fintech companies, telecommunications companies, and regulators to unravel the puzzle of institutional governing logics. We used NVivo for our data analysis.
Results: Despite the proliferation of DFS in most emerging markets, stakeholders are not fully leveraging DFS data to inform credit assessments or to expand access to formal credit.
Originality: Our findings contribute to the literature by highlighting gaps in institutional logics and suggesting the urgent need to rethink, unlearn, relearn, and adapt to the rapidly changing environment to meet market trends and consumer needs.