Artificial Intelligence–Driven Financial Inclusion And Green Entrepreneurship: Examining The Role Of Digital Lending Platforms In Promoting Sustainable Sme Growth In Pakistan

Abstract

Artificial intelligence (AI)-driven digital lending platforms are reshaping financial ecosystems by improving credit accessibility, reducing information asymmetry, and enhancing efficiency in financial decision-making. In developing economies such as Pakistan, where small and medium enterprises (SMEs) face persistent financing constraints, these technologies present a promising pathway toward strengthening financial inclusion and promoting sustainable entrepreneurial development. This study examines the impact of AI-enabled digital lending platforms on financial inclusion, green entrepreneurship, and sustainable SME growth in Pakistan. Grounded in a quantitative research design, data were analyzed using Structural Equation Modeling (SEM) to test direct, indirect, and mediating relationships among the constructs. The findings reveal that AI-driven lending platforms significantly enhance financial inclusion, which in turn positively influences green entrepreneurship and sustainable SME growth. Furthermore, financial inclusion partially mediates the relationship between AI-based lending systems and sustainability-oriented entrepreneurial outcomes. The study also identifies regulatory, technological, and digital literacy barriers that weaken the effectiveness of AI-driven financial inclusion mechanisms. The results highlight the transformative role of AI in aligning financial innovation with sustainability objectives in emerging economies. This study contributes to fintech, entrepreneurship, and sustainability literature while offering practical insights for policymakers, financial institutions, and SME stakeholders in Pakistan.

Keywords:

Artificial Intelligence; Financial Inclusion; Digital Lending Platforms; Green Entrepreneurship; SMEs; Sustainable Development.