Does the Development of Digital Finance Alleviate the Credit Financing Constraints of Small and Medium-Sized Enterprises?

China’s digital economy has developed rapidly after the 19th National Congress of the Communist Party of China. As an important part of the digital economy, the application and development of digital finance has provided a better path for financial institutions about services innovation and business development. Small and medium-sized enterprises (SMEs) account for a large proportion of the number of enterprises in China. They affected the society deeply on various aspects such as economic growth, employment, and innovation. However, financing constraints characterized by “difficult requirements” and “high cost” have long restricted the development of small and medium-sized enterprises. In recent years, the growth rate of the international economy has slowed down in an all-round way due to the impact of the epidemic. The SMEs have become more severe in this environment with stronger demands for funds. The rapid development of digital finance provides a technical environment for substantially improving the availability of loans for SMEs. As the main source of financing for small and medium-sized enterprises, commercial banks can deal with the problem of information asymmetry between them and SMEs easily through comprehensive digital transformation. Furthermore, the digital transformation of commercial banks could alleviate the financing constraints of SMEs and allocate more credit resources for SMEs. This study uses Peking University’s digital financial inclusive index and the SMEs’ loan data from the specific commercial bank for empirical analysis. The results demonstrate that the development of digital finance can alleviate the financing constraints of SMEs and reduce the information asymmetry between banks and enterprises. Moreover, the digital finance could also improve the overall business efficiency of commercial banks. In addition, SMEs with relatively in-depth digital transformation are easier for taking advantage of the opportunity of digital financial development to alleviate their own financing constraints. This study provides effective suggestions for the administrative department to formulate relevant guiding policies for digital financial development, commercial banks’ digital business strategy formulation, and more financial resource allocation for SMEs with development prospects based on the research conclusions.