Firm Credit Constraints and Electronic Payments: A Global Analysis

Manuel Galilea, Subika Farazi and Davide Salvatore Mare

No 11287, Policy Research Working Paper Series from The World Bank

Abstract: Understanding the drivers of credit constraints is essential for fostering private sector development and firm growth. This study examines the channels through which electronic payments influence firm credit constraints across 101 economies. It explores heterogeneity at the firm and aggregate levels to identify key policy and environmental factors that shape this relationship. The findings indicate that payment digitalization plays a critical role in alleviating firm credit constraints, particularly for small firms and in economies with weaker credit infrastructure and lower levels of financial development. These results support the view that electronic payments help reduce information asymmetries between firms and lenders, thereby improving lending opportunities.

Date: 2026-01-09
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