Abstract Financial technology's quick development promises to give small and medium-sized businesses (SMEs) more growth potential, efficiency, and inclusivity. However, adoption in emerging nations is still uneven and frequently superficial, limited by contextual constraints rather than technological availability. This study presents and validates a Contextualized Innovation Framework (CIF), which reorients FinTech adoption around three interlocking dimensions: institutional trust, infrastructural readiness, and cognitive perception. This represents a significant departure from the cognitive limitations of the Technology Acceptance Model (TAM). The study, which is based on empirical research with SMEs in Tamil Nadu, a region that is indicative of India's digital transformation, shows that adoption happens as a phased process of digital maturity that is influenced by systemic barriers and facilitators rather than as a one-or-the-other. Results show that while digital literacy acts as a direct enabler rather than a background condition, institutional legitimacy and cybersecurity assurance frequently trump perceived utility in promoting or preventing adoption. Policymakers and FinTech companies can create tiered, context-sensitive interventions that transition SMEs from transactional digitization to strategic financial empowerment by using the CIF's innovative, practical lens. This paradigm offers a scalable model for inclusive digital transformation throughout the Global South by prioritizing stages over individual decisions and structure over sentiment.
Jovin. R.B and Arockia Rajasekar (Sun,) studied this question.