Evaluating the Impact of Fintech Solutions on Microfinance Institutions in Karnataka

Dr. B. A. Karunakara Reddy, Hema N

Abstract: The integration of financial technology in microfinance institutions (MFIs) has accelerated in recent years, which transformed both the financial inclusion and MFI operations and functioning. This paper aims at assessing the effect of fintech on MFIs in Karnataka with specific focus on loan disbursement and customer satisfaction as well as financial inclusion. Questionnaire survey among MFI stakeholders served as the means of collecting primary data and statistical analysis was done in the use of SPSS. Validity of the measures was as follows: Interitem reliability analysis performing Cronbach?s Alpha was equal to 0.84 that showed reasonable internal consistency of the questionnaire. Thus, the results of regression analysis revealed that there was a good impact of fintech on loan processing efficiency (F = 15.68, R? = 0.72, p < 0.01). An analysis conducted using the Chi-square test suggested significant relationship between digital payments and financial inclusion at the value of ?? = 45.63 p < 0.01. It was evident in descriptive statistics analysis that there has been an improvement in the number of digital transactions since account ownership went up from 45% to 75%. People?s satisfaction after the implementation of fintech had also received better ratings with three quarters of the users being satisfied with the services provided. In summary, the study draws the conclusion that the application of fintech has brought a significant positive impact on the performance of MFI?s success, the reduction of time of processing and the increase of the access to finance. Thus, the study calls for more advancement in the application of digital finance to achieve high expansion of financial inclusion in emergent economies.

Keywords: Digital Transactions, Fintech Adoption, Financial Inclusion, Loan Efficiency, Microfinance Institution

How to Cite?: Dr. B. A. Karunakara Reddy, Hema N, "Evaluating the Impact of Fintech Solutions on Microfinance Institutions in Karnataka", Volume 14 Issue 7, July 2025, International Journal of Science and Research (IJSR), Pages: 1467-1475, https://www.ijsr.net/getabstract.php?paperid=SR25721195654, DOI: https://dx.doi.org/10.21275/SR25721195654