Fintech, financial inclusion and income inequality: a quantile regression approach (original) (raw)
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International Journal of Applied Economics, Finance and Accounting
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This study analyzes the impact of the proliferation of Financial Technology (FinTech) on the achievability of the Sustainable Development Goals (SDGs) with respect to extreme poverty by 2030. The study uses system General Method of Moments (GMM) dynamic panel estimation methodology on annual data for 12 MENA and 45 SSA countries in addition to 70 emerging markets and developing economies from outside the two regions over the period from 2004 until the latest available data in 2018. Three different measures characterize FinTech adoption: the number of mobile cellular subscriptions per 100 people, the number of fixed broadband subscriptions per 100 people, the percentage of people in the population who use the internet. The preliminary results of the study indicate that FinTech measures have a positive statistically significant impact on reducing extreme poverty for the full sample as well as the MENA and the SSA regions. The second part of the study employs a gap analysis against fou...
The Impact of Financial Inclusion on Income Inequality
Open Journal of Social Sciences, 2023
All around the world, the value of an inclusive financial system is prioritized. Since most of the Middle East and North Africa (MENA) region's governments lacked sufficient formal financial services and the majority of their populations lacked access to conventional bank accounts, the issue of financial exclusion became increasingly important. Financial inclusion benefits not only individuals and families but also entire communities as a whole and can stimulate the economy. This study's objective is to evaluate the impact of financial inclusion on MENA region's income inequality. The aim of this study is to investigate the impact of financial inclusion on the income inequality of MENA region countries. To achieve this aim, a three-dimension Financial Inclusion Index (FII) was created using Principal Component Analysis (PCA) to measure each country's level of financial inclusion. These dimensions are access, usage, and quality of financial services. Data was collected from 18 MENA (Middle East and North Africa) region countries using a sample period from 2004 to 2019. Based on a 2-step Generalized Method of Moments (GMM) system, the results showed that an increase in the level of financial inclusion leads to the decrease of MENA region countries' income inequality.
THE IMPACT OF FINTECH ON FINANCIAL INCLUSION: EXPANDING ACCESS TO FINANCIAL SERVICES
Granthaalayah Publications and Printers, 2024
This research looks at how FinTech has changed financial inclusion in India, focusing on how it has improved access to loans, insurance, savings, and sending money back to family and friends abroad. Even though there have been big steps forward, problems like limited internet access, digital literacy, regulatory hurdles, and a lack of funds are slowing its growth. The study looks at trends, problems, and possible futures by using secondary data from trustworthy sources. It says that India needs to keep coming up with new technologies, policies that help them, partnerships, and financial education programmes in order to use FinTech to close the financial inclusion gap and boost economic growth.
Financial Inclusion and Stability: Linkages Among Financial Development and Economic Growth
Purpose. More than half of the world's adult population lacks access to credit, insurance, savings accounts, and other forms of formal financial services. Therefore, providing access to financial services for all has become a priority for national policymakers, multilateral institutions and other players in the development and innovation field. The aim of this paper is to answer the following questions: What are the key processes that lead to an inclusive financial system and what are the wider (longer term) impacts of improved financial inclusion on the lives of disadvantaged people, their quality of life and life chances. Approach. The questions are answered by adopting a multi-stage approach. The first stage involves 'talking' to 'knowledgeable' individuals of agencies/projects that deliver financial inclusion services and aims at getting a sense of the types of agencies that deliver financial inclusion, their experiences with promoting financial inclusion, and the (perceived) wider impact on service users. The second and third stages are central to this paper since they aim at capturing how people make use of financial inclusion services and the longer term impacts of improved financial inclusion on their life chances and quality of life. Findings. As the economy is moving towards virtual currencies and digital innovations in finance, a bank account has become an essential tool in shaping an inclusive financial system, given its promise to reduce or eliminate the inefficiencies surrounding the conduct of specific types of financial transactions and to increase financial inclusion. Moreover, access to banking is considered a basic necessity in most developed countries. Financial services and instruments play an important role in the process of domestic economic development. While some scholars have focused on the interaction of large or small enterprises, the most important consumers of financial products are the households due to their influence the scale and asset mix of finance. Value. The paper takes into consideration digital innovations in finance (or FinTech), which have, in recent years, attracted considerable attention from public authorities, financial sector stakeholders and academia, given their promise to reduce or eliminate the inefficiencies surrounding the conduct of specific types of financial transactions, and to increase financial inclusion.
Nexus between Financial Inclusion, Financial Inequality, Economic Growth and Income Inequality
Journal of Banking, Finance and Insurance , 2024
This article attempts to analyze the nexus between financial inclusion, inequality in the distribution of financial services, economic growth and inequality by using a sample of 112 countries. It estimates financial inclusion index for the countries using a number of access and usage indicators and then investigates the linkages of such index with growth, financial inequality, and income inequality. Results show that even though Nepal has progressed a lot in expanding financial inclusion, it ranks 70 out of the 112 countries included in the study in a crosscountry context implying that more need to be done in the future to come in the forefront. In addition, results from the growth and inequality regression demonstrate that in the presence of higher inequality in the distribution of financial services, the gains from financial inclusion might not be realized as expected. This calls for the attention of the policymakers to address the inequality in financial services so that financial inclusion can contribute to higher and equitable growth.
Fintech use, digital divide and financial inclusion
Digital Policy, Regulation and Governance
Purpose Financial Technology (FinTech) innovations enable the provision of financial services to many unbanked across the world by increasing access. The key role of FinTech to drive financial inclusion however suffers significant impediments including the digital divide. Nevertheless, there is paucity of elaborate theories on financial inclusion while extant literature on FinTech only identify factors that drive its acceptance and use with little attention to inhibitors such as the digital divide. This study aims to investigate the impact of FinTech usage on financial inclusion amid the digital divide. Design/methodology/approach This study uses the unified theory of acceptance and use of technology (UTAUT2) and the model of digital inequality. A structural equation modeling technique is applied to data collected from 282 respondents in an online survey. Findings The findings confirm a positive influence of FinTech use on financial inclusion as well as the influence of performance ...
Social Sciences & Humanities Open, 2025
Financial inclusion in Africa faces significant challenges, including inadequate infrastructure, regulatory obstacles, and socioeconomic barriers, which limit access to financial services for underserved populations. In response to these challenges, this study examines how financial inclusion influences economic growth and poverty reduction across three Sub-Saharan Africa regions, namely East, West, and Southern Africa, spanning 28 countries from 2016 to 2023. Financial inclusion is measured through the availability of Automated Teller Machines and digital financial services, using a system Generalised Method of Moments and Quantile regression approach. The findings emphasise the pivotal role of digital financial services in expanding access to financial resources, particularly in East and Southern Africa, while highlighting ongoing disparities in West Africa. The quantile regression analysis reveals that inflation adversely affects GDP growth across all quantiles, whereas foreign direct investment consistently supports economic growth. Furthermore, the findings showed that digital financial services are more effective than automated teller machines in promoting financial inclusion, and infrastructure and digital literacy improvements are recommended to accelerate progress. In conclusion, enhancing digital financial services in Sub-Saharan Africa has the potential to significantly improve financial inclusion, drive economic growth, and reduce poverty levels. The study suggests that Sub-Saharan African countries should prioritise digital financial services, invest in infrastructure, promote financial literacy, and implement inclusive policies to ensure broader access to financial resources. This is because promoting digital financial services can offer Sub-Saharan African countries a path toward economic empowerment and alignment with Sustainable Development Goals, helping to bridge the financial inclusion gap.