Keywords
Artificial Intelligence
MSMEs
Machine Learning Credit Analysis
Credit Risk
Credit Scoring Models
How to Cite
Abstract
This study investigates the impact of artificial intelligence (AI) applications on reducing default risk in micro, small, and medium enterprises (MSMEs), with the aim of ensuring financial sustainability. By focusing on 450 MSMEs located in the North Al Batinah Governorate of the Sultanate of Oman, the research uses a regression model and various statistical tests to examine the relationship between AI adoption and default risk. The findings indicate that the use of AI is the most influential factor in mitigating default risk, highlighting the importance of encouraging AI adoption among MSMEs. Additionally, the perspectives of MSME owners play a significant role, suggesting that raising awareness of AI's benefits in credit risk management is essential. The study is limited to a specific region in Oman but offers valuable insights into the challenges and benefits of AI implementation in MSMEs. It recommends initiatives to shift the mindset of MSME owners toward embracing AI, as well as policies to support investment in AI tools to strengthen credit risk assessment and prevent financial distress. This research contributes to the growing body of knowledge by demonstrating how AI can reduce default rates and improve repayment performance, ultimately supporting the financial sustainability of MSMEs.
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