Spherical Fuzzy Approach to SME Funding Innovation

This research paper investigates the evolving landscape of financing processes for small and medium-sized enterprises (SMEs) through the lens of alternative finance instruments. It outlines the limitations of traditional bank loans, which often fail to meet the diverse and dynamic funding needs of SMEs due to their rigid conditions and lengthy approval processes. The study employs a novel integration of three multi-criteria decision analysis (MCDA) methods—Spherical Fuzzy TOPSIS, Entropy, and Additive Ratio Assessment (ARAS)—to evaluate various funding alternatives based on criteria such as interest rates, flexibility, accessibility, support, riskiness, and approval time. The findings reveal that while traditional loans remain a critical source of funding, alternative finance options like peer-to-peer lending are gaining traction, offering SMEs more flexible and timely solutions. The paper emphasizes the necessity for banks to innovate their funding strategies to remain competitive in an evolving financial environment, particularly in light of the increasing preference for alternative financing among SMEs.