A Comparative Analysis of Hybrid Finance Models for SMEs Financing in Emerging and Developed Economies: Nigeria and Poland as Examples

Abstract

Small and Medium Enterprises (SMEs) face a persistent financing gap globally, estimated at significant portions of GDP in emerging markets like Nigeria, while facing different structural barriers in developed economies like Poland. Decentralized Finance (DeFi) offers theoretical solutions through peer-to-peer lending and tokenized assets, yet pure DeFi adoption remains low among SMEs due to regulatory uncertainty, technical complexity, and volatility. This paper employs Institutional Theory (North, 1990) and Ozili's (2023) tripartite framework of regulation, infrastructure, and capacity to compare the Nigerian and Polish contexts. Drawing on a synthesis of recent literature (2018-2026), the study argues that "pure" DeFi is ill-suited for immediate SME adoption in either context. Instead, a "Hybrid Finance" model where regulated fintech intermediaries bridge traditional banking and blockchain protocols offers the most viable pathway. The analysis highlights Nigeria's reactive regulatory stance (e.g., the 2021 ban and subsequent lifting) versus Poland's adaptive integration within the EU's Markets in Crypto-Assets (MiCA) framework. The paper concludes that institutional embedding, rather than technological disruption alone, is critical for closing the SME financing gap.