The Impact of Mobile-Based FinTech Lending Platforms on Credit Access for Unbanked Micro-Entrepreneurs in Emerging Economies: Empirical Evidence from Bangladesh

Despite Bangladesh's extensive Mobile Financial Services infrastructure catering to over 220 million users, just 9.1% of people access official credit sources. This mixed-methods study examines the influence of mobile-enabled FinTech lending platforms on credit accessibility and business performance for 300 unbanked micro-entrepreneurs in rural and semi-urban areas of Bangladesh. The study used stratified sampling, surveys, and semi-structured interviews to investigate whether the magnitude of digital footprints predicts loan approval as well as perceived loan worth. Research reveals a notable paradox: whereas digital footprint is a robust predictor of loan approval, it shows no link with perceived helpfulness. Borrowers across all tiers of digital engagement primarily indicated that loans were unbeneficial, citing issues such as payback anxiety, concealed costs, and inadequate loan amounts. In contrast to true financial freedom, the study shows that algorithmic access that lacks clear pricing, financial literacy support, and flexible repayment choices promotes transactional inclusion. FinTech lending in Bangladesh operates inclusively in its approval processes, although fails to have significant developmental effects. The study promotes legislative frameworks that require fee transparency, set minimum loan thresholds for company investments, introduce flexible repayment choices, and offer formal grievance processes to transform digital access into meaningful financial inclusion.