• Ahmed Al-Musallam Chuc University of Bahrain
  • Ahmed Abdulwahed Atayah University of Bahrain
  • Salman Qarata Özer University of Bahrain


Purpose of the Study: The study sought to explore the Impact of Financial Technology (Fintech) on Financial Performance of Micro Finance Institutions in Bahrain.

Statement of the Problem: The primary objective of this study is to investigate the influence of Financial Technology (Fintech) adoption on the financial performance of Micro Finance Institutions in Bahrain. Specifically, the research aims to assess the extent to which Fintech solutions, such as digital lending and mobile banking, affect key financial indicators, such as profitability and operational efficiency, within the microfinance sector in Bahrain.

Methodology: The study was literature based. The study collected and analyzed existing research and publications to inferences.

Findings: The introduction of Financial Technology (Fintech) in Bahrain's Micro Finance Institutions (MFIs) has significantly enhanced operational efficiency, reducing costs and expediting loan processing. The automation and digitalization of financial services have led to lower overhead expenses, resulting in improved financial performance for MFIs. Fintech adoption has strengthened risk mitigation strategies within MFIs, with advanced risk assessment models enabling more accurate lending decisions. As a result, default rates and non-performing loan ratios have decreased, contributing to the financial stability of these institutions. The findings also emphasize the positive impact of Fintech on customer satisfaction and trust, with 24/7 services, mobile apps, and online banking creating a more convenient and accessible experience. Strong customer relationships are pivotal for attracting and retaining clients, ultimately benefiting the long-term financial performance of MFIs.

Conclusion: In conclusion, the impact of Financial Technology (Fintech) on the financial performance of Microfinance Institutions (MFIs) in Bahrain has been overwhelmingly positive. Fintech has facilitated improved operational efficiency, risk mitigation, and customer satisfaction, all of which have directly contributed to the enhanced financial stability and profitability of these institutions. To sustain and maximize these gains, MFIs must continue to embrace Fintech innovation, prioritize regulatory compliance, and invest in cybersecurity, ensuring that they remain well-positioned to serve their clients and adapt to the ever-evolving financial landscape in Bahrain.

Recommendations: Micro Finance Institutions (MFIs) in Bahrain should consider diversifying their Fintech offerings to meet a wider range of customer needs, expanding beyond traditional microloans to services like digital payments, savings, and insurance, which can increase revenue streams and improve financial performance. MFIs should actively engage in partnerships and collaborations within the Fintech ecosystem, including fintech startups, tech companies, and regulatory authorities, to stay at the forefront of technological advancements and regulatory compliance, enabling them to leverage Fintech to its fullest potential for long-term financial success.

Keywords: Financial Technology, Financial Performance, Micro Finance Institutions, Bahrain

Author Biographies

Ahmed Al-Musallam Chuc, University of Bahrain

University of Bahrain

Ahmed Abdulwahed Atayah, University of Bahrain

University of Bahrain

Salman Qarata Özer, University of Bahrain

University of Bahrain


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How to Cite
Chuc, A. A.-M., Atayah, A. A., & Özer, S. Q. (2023). IMPACT OF FINANCIAL TECHNOLOGY (FINTECH) ON FINANCIAL PERFORMANCE OF MICRO FINANCE INSTITUTIONS IN BAHRAIN. African Journal of Emerging Issues, 5(17), 1 -11. Retrieved from