Small and medium-sized enterprises (SMEs) often face persistent challenges in accessing financial resources,

adapting to technological advancements, and sustaining competitiveness in an increasingly digitalised economy.

SMEs continue to be limited by their resourcefulness, lack of digital literacy, and poor access to funding

platforms, thus delaying their desired growth and sustainability despite the increasing roles of financial

technologies and digital innovations. This study aims to develop a conceptual model that examines the

strategic development, emphasising the role of resource reconfiguration, workforce capacity, and networks of

collaboration in digital transformation. This study also highlights the important functions of digital finance in

mitigating the credit constraint, alternative finance instruments in widening the availability of finance, and co-

creation networks in aligning business development with sustainability. The theoretical implications of this

research are two-fold: first, the study contributes to academic discussions on the digital transformation of SMEs

through an integrated conceptual framework; second, it provides practical recommendations that can be used by

SMEs, policymakers, and financial institutions to improve digital readiness and financial resilience. Finally, this

paper would need additional empirical verification of the propositions made and serve as a guide into future

research involving sector-specific aspects and emerging digital technologies.

lending [11], [14]. In the emerging economies, digital financial innovations are viewed as a way of causing

financial inclusion to reduce the existing credit constraints that have harmed the growth and survival of SMEs

[13]. It is in this context that having knowledge about how SMEs are able to strategise their way through the

digital finance environment has become a theoretical and practical imperative.

Existing studies point to several motivating factors of digital finance use amongst SMEs, such as better financial

performance, improved customer relations and access to different finance models [15], [17], [20]. As an example,

research shows that the combination of digital marketing measures and financial tools ensures more market

penetration and sustainability [17], [18]. In the same manner, the critical role of human capital development is

highlighted in facilitating the realisation of the benefits of digital financial innovation by the SMEs since skilled

employees enhance organisational efficiency and technological application [19]. These advances however, have

understanding, small and medium businesses risk having inadequate use of digital financial services and

policymakers may not have frameworks that can be used to address the transformation of SMEs. Addressing this

issue requires a conceptual framework that brings together SME strategies, strategic growth, and online financial

services in an integrated approach.

This paper aims to bridge the research gap by proposing a conceptual model that positions strategic development

as a mediating mechanism between SME strategies and digital financial solutions. Drawing from previous

research findings, the model shows how SMEs can strategically combine digital capabilities, workforce

conservation, and sustainability behaviour in order to increase the leverage of the financial innovations. This

method not only advances the theoretical body of knowledge on digital finance in SMEs, but also provides viable

suggestions on how it is possible to make SMEs in the digital age more competitive. The value of the study is

The structure of the paper is the following: the second section will provide a literature review on SME strategies,

strategic development and digital financial solutions. The next section presents the proposed conceptual

framework that includes the posited relationship of the constructs to each other. The paper is concluded by stating

theoretical and practical implications as well as recommendations on future studies.

The proposed conceptual model is grounded in three central constructs: SME strategies, strategic development,

and digital financial solutions (DFS). Reviewing these constructs provides the theoretical foundation for

understanding how SMEs can enhance competitiveness and financial resilience in an increasingly digitalised

economy.

Moreover, SMEs that embed innovation-driven strategies are better positioned to reconfigure their business

models and adapt to changing environments [3]. Collectively, these strategies serve as the foundation for SMEs

to build and sustain competitive advantage in dynamic markets.

While SME strategies provide direction, their effectiveness depends on the firm’s ability to translate intent into

actionable processes. In this study, strategic development is conceptualised as a dynamic organisational process

rather than a static outcome. It encompasses three interrelated sub-dimensions:

1. Strategic Planning Formalisation – the extent to which SMEs articulate structured roadmaps and

formalised plans that guide digital adoption and innovation. This process reduces uncertainty and ensures

coherent alignment of resources [1].

2. Dynamic Capability Building – the ability of SMEs to reconfigure resources and adapt to external shifts,

constraints, reduce transaction costs, and expand financial inclusion [11-12]. DFS also provides SMEs with new

opportunities for operational efficiency, customer engagement, and business model innovation. For example,

mobile payment systems reduce barriers to financial access, while crowdfunding platforms enable SMEs to

secure capital outside conventional banking systems [13]. Moreover, DFS integration enhances SMEs’ financial

resilience by diversifying financing channels and aligning business practices with digital transformation

Taken together, the literature suggests that DFS adoption represents not only a technological advancement but

also a strategic imperative for SMEs striving for long-term competitiveness and sustainability.

This study adopts a systematic narrative review design. Unlike purely descriptive narrative reviews, a systematic

The systematic narrative review process adopted in this study followed four structured steps: identification,

screening, eligibility, and synthesis. These stages are summarised in Figure 1, which visually illustrates how

relevant studies were identified, filtered, assessed for inclusion, and synthesised into the conceptual model.

Figure 1: Key Steps in Conducting a Systematic Narrative Review

Data collection was carried out using a targeted search strategy in the Scopus database. The search string was

designed to capture diverse but interconnected concepts related to digital finance and SMEs:

("digital" OR "online" OR "electronic" OR "virtual") AND ("financial" OR "finance" OR "monetary" OR

"economic") AND ("solutions" OR "services" OR "tools" OR "products") AND ("SME" OR "small business"

technological financial solutions, and (3) provided insights on access, inclusion, or strategic development.

Exclusion criteria removed articles focused solely on large corporations or non-business digitalisation contexts.

When the dataset was described, an integrative thematic analysis approach was applied to articles [30]. This

process included the process of open coding in order to extract common themes (e.g., digital financial inclusion,

capability development, human capital, sustainability, alternative finance) and then a set of broader dimensions

based on the interactions between SME strategies, strategic development, and digital financial solutions. The

synthesis made possible the expression of a conceptual framework that connects bits of knowledge to a

comprehensive framework and provides a new input to SME and digital finance research.

The theoretical framework of this study is grounded in the Resource-Based View (RBV) and the Dynamic

Capabilities Theory. Together, these theories provide a lens to understand how SMEs develop strategies that

conceptual framework of SME strategies and strategic development with regard to digital financial solutions.

alternative financing, and sustainability approaches. Below is a table summarising the key findings and their

The review highlights that digital finance plays a pivotal role in alleviating credit constraints, thereby enabling

SMEs to access the capital required for survival and expansion [11]– [13]. Digital financial tools such as mobile

collaborations, emerge as transformative mechanisms that diversify SMEs’ financing opportunities and enhance

Finally, the review points to the necessity of embedding sustainability considerations within SME strategies. The

Triple Bottom Line (TBL) framework encourages SMEs to balance profitability with environmental and social

impacts, while co-creation networks provide opportunities for SMEs to pool resources and collaboratively build

digital ecosystems [10].

planning, SMEs can strengthen their dynamic capabilities, leading to more resilient business models and

preparedness for digital financial adoption [8]. Based on this reasoning, it is proposed that SME strategies