AI–Blockchain Convergence for Inclusive Fintech: Enabling Microenterprise Financing and Trust in Emerging Economies

Abstract

Availability of low costs finance is also a thorn in the flesh of micro-enterprises in emerging economies because of poor credit records, high transaction costs, information asymmetries and institutional mistrust. Formal banking systems tend to ignore informal entrepreneurship and limit economic inclusion and economic growth. In order to solve this issue, this paper offers an AI-Blockchain convergence model of inclusive fintech that facilitates data-driven microenterprise financing in a transparent way and enhances trust between stakeholders. The suggested approach is a combination of credit scoring schemes based on artificial intelligence and distributed ledgers and smart contracts built on blockchain technologies. AI models use alternative data sets (e.g., transaction behavior, mobile payments, and patterns of business activity) to produce explainable credit risk ratings, whereas blockchain provides immutability, transparency, and safe implementation of lending agreements without the intermediaries. The real and simulated microfinance datasets have been evaluated experimentally, where it was evidenced that performance improved significantly. The new framework is also characterized by a greater accuracy of credit risk prediction through 22.8% lessening loan default through 17.4% lower operational and verifier costs through 31.6% shorter loan disbursement duration as compared to the traditional microfinance systems. There is also an improvement of 35.9 in the trust and transparency indicators which are measured by the frequency of dispute resolution and the auditability. The results prove the idea of AI-Blockchain convergence that could significantly increase financial inclusion by making credit access more equitable, less systemic, and able to create trust in digital financial ecosystems. The paper concludes that this type of built-in Fintech architecture can be used to transform the empowerment of microenterprises, inclusive economic growth, and resilient financial systems in developing economies.