Digital financial inclusion and income inequality nexus: Can technology innovation and infrastructure development help in achieving sustainable development goals?

Abstract

The United Nations (UN) 2030 agenda for sustainable development seeks to eliminate poverty in all its forms. An estimated 1.3 billion people in the BRICS countries are below the poverty line. This study examines the nexus between digital financial inclusions (DFI) and income inequality GINI) in the context of BRICS countries, with a focus on the moderate impacts of technological innovation (TI) and infrastructure development (ID). Applying the Driscoll-Kraay (DK) and fixed effects tests, the results show that DFI significantly negatively influences income inequality, with TI and ID contributing to strengthening this effect. The findings indicate that implementing TI and ID can potentially decrease income inequality in BRICS nations by facilitating faster, more secure, cost-effective transactions and offering greater access to markets and essential services. This study emphasises the need for policymakers to prioritise the implementation of TI and ID to accomplish sustainable development goals and encourage financial inclusion for all in the BRICS countries.