Exploring the roles of social capital, social interaction and financial literacy in shaping access to finance for Indian SMEs

Purpose: Access to finance remains a key constraint for SME growth in emerging markets. This study examines how bridging social capital enhances financial inclusion in India by assessing its direct effect on credit access, its indirect influence through social interaction, and the moderating role of financial literacy. Grounded in Social Capital Theory and Information Asymmetry Theory, this framework also clarifies how these mechanisms contribute to advancing sustainable development. Methodology: Survey data from 593 SMEs were analysed using exploratory and confirmatory factor analyses, CB-SEM for measurement validation, and PLS-SEM for testing mediation, moderation, and conditional pathways, with robustness confirmed through diagnostic checks. Findings: Bridging social capital directly enhances credit access and indirectly through social interaction. Interaction independently improves access. Financial literacy exerts no direct effect but strengthens the interaction–access pathway. The unsupported moderated mediation underscores relational trust as the key evaluative threshold. Implications: Policy design should integrate network-building with relationally embedded literacy initiatives delivered through associations, cooperatives and SME forums. Strengthening women’s and rural networks, and utilising relational indicators, can enhance financial inclusion. Originality: The study shows trust as the threshold, interaction as the mechanism and literacy as the amplifier, contributing to SDG 8 and SDG 9 by demonstrating how social capital and interaction foster inclusive SME growth.