In an era of increasing globalization and rapid technological evolution, SMEs are leveraging innovations to navigate complexities and seize opportunities in global markets. Various firms have adopted innovative technologies in their operations, with FinTech breakthroughs being a particularly interesting area for companies to explore. This qualitative study aims to provide a deeper understanding of how FinTech is reshaping pathways for SMEs to expand internationally beyond their domestic markets and seeks to explore the specific FinTech solutions facilitating this expansion. Utilizing a combination of methodological tools, including semi-structured interviews with key business players, real-life case studies, analysis of previous scientific research, and thematic exploration, the study employs an abductive research approach to gather comprehensive data and contribute significantly to the topic in question. The findings reveal that FinTech products and services significantly influence European SMEs, facilitating cross-border operations, improving access to foreign markets, and managing the risks of international business. Essential FinTech services identified include digital payments, online lending, cash flow management tools, and online billing and invoicing tools. The research also highlights that for certain underserved regions in Europe, FinTech solutions often represent the only viable option for international operations. Tech-driven SMEs and younger entrepreneurs are the most frequent consumers of FinTech technologies. While the future of FinTech is uncertain, its current importance in the SME landscape is clear, influencing both its continued relevance and potential for further evolution. Through this in-depth investigation, the thesis emphasizes FinTech’s transformative role in helping SMEs thrive in the international arena, making it a key aspect of the international business plans of SMEs.

This thesis examines three issues about European SMEs. Chapter Two examines how sustainable growth firms obtain external finance during and after the 2008 financial crisis. Although sustainable growth firms have past growth records and future growth aspirations; however, those firms may face challenges in obtaining external finance. We find that those firms increase their demand for external finance after the financial crisis and obtain finance from suppliers during this period to implement their growth activities. In contrast, firms are less likely to secure loans from banks during this period. Chapter Three examines how SMEs can reduce information asymmetry and increase the probability of obtaining a bank loan. SMEs can easily establish a lending relationship with suppliers, which may improve firms’ creditworthiness and reduce information asymmetry. We show that SMEs that suffer information asymmetry can obtain bank finance if these firms establish a significant relationship in the past with suppliers. This finding is more prominent for small firms as banks refuse their loan applications due to information asymmetry. Chapter Four examines financially constrained SMEs for increasing sales growth through innovation activities. As innovation has a positive effect on sales growth; therefore, conducting innovation activities can improve cash flows to constrained firms. We find that financially constrained SMEs can obtain sales growth if they conduct innovation activities. Our results suggest that product and process innovation are significant for financially constrained SMEs as those innovations provide additional cash flow in firms to reduce the adverse effect of the constrained condition.