Innovation and Digital Revolution: The Role of Fintech in Mitigating the Effects of Covid-19

The COVID-19 pandemic has drastically transformed various aspects of daily life, and its impact on global economic activity has been severe. As a result, microfinance institutions (MFIs) have become increasingly important in improving the standard of living for the poor. This study aims to investigate the impact of fintech on the services provided by MFIs in the financial sector, specifically in the microfinance sector of Pakistan. Using fintech as an independent variable with four indicators, microfinance services as a dependent variable with four indicators, and COVID-19 as a moderator variable with one indicator, the study employs a quantitative research method with a five-point Likert scale questionnaire. A random sampling technique was used to select a sample of 300 employees from five out of 11 MFBs in Pakistan, with 276 responses considered appropriate for further analysis. The researchers used MS Excel and SmartPLS software to analyze the reliability and validity of the data, and PLS-SEM techniques were used to evaluate the relationship between fintech and MFIs, and the moderating effect of COVID-19. The study found a positive and significant impact of fintech on MFIs, and the moderator variable (COVID-19) enhanced the relationship between fintech and MFIs. These findings highlight the importance of integrating fintech into the services provided by MFIs to improve the overall economic activity of the microfinance sector, particularly in the context of the COVID-19 pandemic.