Embedded finance: benefits, challenges and prospects for SMEs

Abstract

Many small and medium-sized enterprises (SMEs) have long been considered “white areas” in the traditional financial system due to their lack of collateral, limited credit history, and small transaction size. However, the development of embedded finance has created significant opportunities for SMEs to grow. This study will present the fundamental concepts of embedded finance, address the reasons behind its rapid growth, and examine its benefits, challenges, and prospects for SMEs both globally and in Vietnam. The findings of this study will help SMEs enhance their internal capacity, enabling them to effectively and sustainably adopt and integrate embedded finance models.