Measuring financial divide in the rural environment. The potential role of the digital transformation of finance

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Financial inclusion, which means the promotion of an affordable, timely and adequate access to a wide range of regulated financial products and services, as well as its use by all the segments of the society, is a high potential tool that may contribute to the development of the rural environment, while its absence could in turn cause a major harm. The availability of a sufficient level of financial literacy, which can be defined as the ability to understand financial concepts and risks, as well as the motivation and trust to use it when making financial decisions, is frequently deemed to be a need to reach financial inclusion by the academic literature. Financial literacy is, in turn, influenced by different variables, such as the degree of rural or urban predominance, the level of education and the available income in the household. This paper analyses the impact of such factors on financial literacy. The degree of financial literacy tends to be lower in rural environments, with limited incomes and poorer educational backgrounds, which creates a vicious circle that potentially worsens the situation of what has been called the empty Spain. Considering the importance of financial literacy to reach financial inclusion, we remark the potential of digital transformation as a valuable tool to break this negative trend in the less populated Spanish regions, and so, a cornerstone for the regenerative development of the Spanish rural areas.