THE ROLE OF ARTIFICIAL INTELLIGENCE IN ENHANCING FINANCIAL DECISION-MAKING FOR SMALL AND MEDIUM ENTERPRISES (SMES)

Abstract

Small and Medium Enterprises (SMEs) are vital contributors to economic development, fostering employment and innovation. However, these businesses often face challenges in financial decision-making due to resource limitations and restricted access to advanced financial management tools. This study examines the role of Artificial Intelligence (AI) in enhancing financial decision-making for SMEs. AI-powered solutions, such as predictive analytics, machine learning algorithms, and automation tools, enable SMEs to optimize cash flow management, conduct risk assessments, and improve operational efficiency. Although AI implementation presents obstacles such as high initial investment costs and data security concerns, its long-term benefits significantly outweigh these challenges. This paper analyzes existing literature, case studies, and real-world applications to explore AI’s transformative impact on SME financial management. The study concludes by offering strategic recommendations for AI adoption to ensure SMEs remain competitive in the evolving digital economy.