According to an IFC report, there are a few key challenges that have long limited the digital transformation of financial services in emerging markets. These challenges include: low access to formal financial services; low income and financial-literacy levels; underdeveloped technology solutions; and weak infrastructures.

Due to these challenges, a World Bank report indicated that a high proportion of financially-constrained SMEs (Small and medium-sized enterprises) refrain from applying for credit entirely; approximately 28% of SMEs in middle-income countries and 44% of SMEs in low-income countries have not sought credit from a traditional financial institution. Some of the SMEs in the report believed that they lacked profitable projects, while others thought their credit applications would fail because they’d be unable to provide all of the required information or the appropriate collateral.