From Survival to Scale – How Fintech is Transforming SME Growth Post-Crisis

For SMEs, access to capital has never been a simple issue, but given the current economic climate, the state is even worse. Lenders are still risk-averse, macro economics are uncertain and inflation is raising operating costs. While many companies struggled to survive the post-pandemic era, now the question comes: how do they scale?

Having worked in both traditional banking and fintech, I’ve seen how high-potential businesses are consistently overlooked by legacy financial systems—not because they lack potential, but because they don’t fit the old risk assessment models. The problem isn’t the quality of businesses but the funding structures that still favor long-established corporations over fast-growing SMEs.

Jack Ma, co-founder of Alibaba, once said, "If you want to grow, find a good opportunity. Today, if you want to be a great company, think about what social problem you could solve." This resonates deeply with the current state of SME financing. The social problem here is the financial exclusion of SMEs, and fintech presents a good opportunity to address it.

The latest Boston Consulting Group (BCG) report, "The Forthcoming Revolution in Small Business Lending" (2025), confirms what I’ve witnessed firsthand—fintech lending is expected to outpace traditional banking, growing by more than 20% annually. Banks are still struggling to serve SMEs, while fintech lenders are using data-driven decision-making and flexible funding models to bridge the gap (BCG, 2025).

In The Real Cost of Financial Exclusion: Why It’s a Business Problem, Not Just a Social Issue, I clarified how defective financial systems not only limit SME potential—they weaken economies in general. Fintech is no longer a question of survival—it's about providing SMEs with access to funding to grow, develop, and thrive.

In this article, I’ll explore:

•  Why traditional financing is no longer enough for growing SMEs

•  How fintech has moved beyond emergency funding to long-term growth solutions

•  What funding strategies SMEs should consider to navigate today’s economy

1. The Limitations of Traditional Financing Post-Crisis

For years, small and medium-sized enterprises depended on banks and traditional lenders for their main source of finance. In the post-crisis era, though, the same lenders are letting SMEs down. Lending conditions are getting tougher, risk assessments are still backward-looking, and many companies no longer qualify under the old credit criteria.

I have spoken with hundreds of SME business owners who tell the same tale: profitable businesses with sound revenue streams are unable to obtain funding as they lack collateral or good credit records. Banks become risk-averse, favoring older, established firms over newer, high-growth firms.

A McKinsey report "Fintechs: A New Paradigm of Growth" (2023) confirms my own personal research—banks are having a hard time keeping pace with the evolving business landscape. The report calls out the manner in which fintechs are stepping into the breach created by risk-averse banks, with flexible, data-driven financing solutions that are more suited to today's economic landscape (McKinsey, 2023).

Where Traditional Financing Falls Short

• Stricter lending criteria – Post-crisis, banks have tightened risk assessments, making it harder for SMEs to qualify.

• Slow approval processes – Traditional loans often take weeks or months, while fintech lenders approve funds in hours or days.

• Inflexible repayment models – SMEs with fluctuating revenue streams struggle with rigid repayment schedules.

In From Ignored to Empowered: Fintech’s Answer to SME Challenges, I explored how fintechs are replacing outdated risk models with more dynamic, real-time assessments. Instead of focusing solely on collateral and historical credit scores, fintech lenders leverage cash flow data, transaction patterns, and AI-driven insights to determine creditworthiness. For SMEs to not just survive but thrive, they need funding solutions that align with how they actually operate today.

2. Fintech’s Role in Empowering SMEs

Traditional lenders can be slow to change, but fintech is not waiting. Fintech has moved in the last ten years from being an alternative source of funding to a mainstream force for SME growth. What began as a way to close liquidity gaps is now a long-term financial plan for companies seeking to grow.

I've had the pleasure of working with SMEs who were once rejected by banks as "too young" or "too digital"—businesses with strong cash flow but no collateral. Today, those same companies are scaling up through fintech funding models that are more appropriate to how they operate. Whether through revenue-based lending, AI underwriting, or embedded finance, fintech is making SME lending faster, nimbler, and more inclusive.

A Harvard Kennedy School report, "Exploring the Value of Embedded Finance for Small and Medium Enterprises" (2024), describes how the embedding of financial solutions within business platforms is breaking down capital barriers. Rather than small and medium enterprises being overwhelmed by cumbersome loan applications, financing is now embedded within the tools they already use—making capital access absolutely seamless (Harvard Kennedy School, 2024).

How Fintech is Changing SME Funding:

• Alternative lending models – flexible financing products allow SMEs to repay based on cash flow, not fixed schedules.

• AI-driven credit decisions – Lenders can assess risk based on real-time financial data, not just credit scores.

• Faster access to capital – Fintech platforms approve loans in minutes or hours, rather than weeks.

In AI in Fintech: Revolutionising Credit Risk Models, I have examined how AI is pushing out old credit scoring with real-time financial analysis. Instead of examining historical creditworthiness, fintech lenders now evaluate actual business performance, which allows them to lend to SMEs that would otherwise be ignored. The transition is evident: fintech is not only filling the gaps left by traditional finance—it is establishing the new benchmark for SME development.

3. The Next Era of SME Growth: Fintech Beyond Survival

Fintech has already demonstrated its potential to assist SMEs in securing capital, but the revolution is truly occurring today—where fundraising is no longer a matter of survival, but rather a means of scaling and long-term expansion.

I have seen firsthand how SMEs that were previously rejected by banks are now leveraging the power of fintech to grow, invest in technology, and enter new markets. The question has changed from "How do we keep businesses afloat?" to "How do we help them grow?".

A report from Deloitte, "Global Fintech: Prudence, Profits, and Growth" (2024), highlights that fintech-facilitated SME lending will grow by over 20% annually as businesses move away from traditional financing constraints. AI-driven credit adjudication and embedded finance models are no longer emerging trends—they're becoming the foundation of SME financial management (Deloitte, 2024).

The Future of SME Funding

• Non-dilutive finance as a growth strategy – Businesses are using fintech to scale without giving up equity.

• Embedded lending as the norm – Funding is increasingly being integrated into business platforms, making capital more accessible than ever.

• AI-powered financial planning – SMEs now have access to tools that predict cash flow needs and optimise funding strategies.

In Fintech Predictions for 2025: What’s Next, I covered how fintech is no longer a choice but is emerging as the financial backbone for SMEs. Whether through embedded lending or AI-driven forecasting, fintech is enabling businesses with the financing solutions they need to scale with certainty.

The change is clear: fintech is not merely reacting to market gaps, it's creating a new funding ecosystem for SME success.

Financial exclusion has long been a barrier to SME success, but fintech is proving that access to capital doesn’t have to depend on outdated banking models. The businesses that were once locked out of funding are now leveraging fintech solutions to grow, innovate, and expand into new markets.

As I explored in Why Non-Dilutive Funding is the Future for SMEs, the financial sector must move beyond traditional lending structures. The next era of SME finance will be defined by:

• Real-time financial data, replacing outdated credit scoring.

• Alternative lending models, making capital more accessible and flexible.

• AI-driven underwriting, ensuring funding flows to businesses with real growth potential.

The financial sector must adapt or risk leaving trillions in untapped SME potential on the table. Capital should flow to where it creates the most value, not just where traditional models dictate.

💬 What’s the biggest barrier SMEs face in accessing funding today? Let’s discuss.