We use transaction-level data from a major payment processor in South Africa to study ‘revenue-based financing’ for small businesses provided by financial technology (fintech) companies. After eight months, payments through the selected processor are 16% lower for businesses that take financing offers than for observably similar non-takers, due to businesses hiding revenue to avoid repayments (moral hazard) and the tendency for riskier businesses to seek financing more frequently (adverse selection). Two natural experiments suggest that fintech platforms’ non-lending interactions with small businesses – for example, payment processing and inventory management – can limit both hiding and selection. By tying repayment to the continued use of non-lending products, fintechs can reduce enforcement and monitoring frictions. Our results help explain the rise of fintech-provided revenue-based financing and provide evidence for policymakers looking to increase financial inclusion and boost the growth of firms, particularly in developing economies.