GLOBAL TRENDS AND NATIONAL CHALLENGES IN THE DEVELOPMENT OF ALTERNATIVE DIGITAL FINANCE: PROSPECTS FOR UKRAINE

Abstract

In the context of the ongoing digital transformation of the global economy, alternative finance is increasingly emerging as a critical component of the financial services landscape. This shift is driven not only by rapid technological innovation—including artificial intelligence, machine learning, big data, mobile banking, and blockchain technologies—but also by the persistent structural limitations of traditional banking systems. These limitations particularly affect micro, small, and medium-sized enterprises (MSMEs) and individuals with insufficient or no credit history, who remain underserved by conventional financial institutions. Countries with advanced fintech ecosystems—such as the United States, the United Kingdom, China, and India—are experiencing a particularly dynamic growth in digital lending, where innovative platforms are now replacing, rather than merely supplementing, traditional credit channels. These developments are largely enabled by supportive regulatory frameworks, high mobile and internet penetration, and growing consumer trust in digital financial services. Against this backdrop, developing countries including Ukraine face a dual imperative: to reduce the financing gap for MSMEs and promote financial inclusion, while simultaneously establishing the institutional, technological, and legal infrastructure necessary for the growth of digital lending. Despite some successful cases (e.g., Moneyveo), the Ukrainian market remains fragmented, highly bank-centric, and constrained by the absence of targeted regulations, low digital trust, and underdeveloped financial innovation. This article explores global trends and regional models of alternative digital finance, assesses the key factors enabling their success, and evaluates the adaptability of such models to the Ukrainian context. It highlights the relevance of implementing sandbox approaches, digital identity mechanisms, and minimum transparency and operational standards for non-bank lending platforms. By synthesizing global experience and national challenges, the article outlines strategic directions for building an inclusive, transparent, and competitive digital lending ecosystem in Ukraine that meets the evolving needs of MSMEs and the wider population.