How critical is SME financial literacy and digital financial access for financial and economic development in the expanded BRICS block?

Introduction: The expanded BRICS block presents significant opportunities for SMEs (Small and Medium Enterprises), but challenges related to financial literacy and digital access hinder their potential. While global efforts emphasize financial literacy and digitization as key drivers of economic growth, especially in developing regions, their specific impact on SMEs in the BRICS block remains underexplored. This paper contributes to the literature by contextualizing how financial literacy and digital financial access influence SME sustainability and economic progress, particularly in light of ongoing efforts to bridge the digital divide. Methods: Using Principal Component Analysis to reduce dimensionality, the study uses advanced Random Forest Tree modeling, to evaluate current practices in SME finance, credit access, and digitization. Results: Results indicate that both financial literacy and digitalization play pivotal roles in driving sustainable economic development, with significant implications for policy interventions aimed at supporting SME growth in emerging economies. Discussion: This study addresses the crucial intersection of SME financial literacy and digital financial access, focusing on their role in fostering economic development within the expanded BRICS block-a group now comprising major emerging economies that collectively face substantial disparities in financial inclusion. The study results are relevant not only for understanding the BRICS context but also for shaping global strategies toward inclusive financial systems and SME resilience in the digital era.