Financial Inclusion Research Articles

Financial Inclusion and Women Economic Empowerment: Role of Pradhan Mantri Mudra Yojana (PMMY) in Promoting Atmanirbhar Bharat in Rural Jharkhand

Formal transactions through bank branches are a component of institutional financial inclusion. One potential way to increase formal financial inclusion and optimize the reach of benefits like direct cash transfers is to provide banking services to the most remote regions of the nation. The rural populace is misinformed about banking rules and loan procedures due to ignorance and incomplete information, which encourages the use of informal sources and makes capital unavailable. The unavailability of capital limits the growth of the entrepreneurial setup in rural areas. The government is pursuing the national financial inclusion goals and Atmanirbhar Bharat (self-reliance) through various initiatives. The involvement of women is essential to achieving the goals of Atmanirbhar Bharat and full institutional financial inclusion. One significant indicator of societal growth is the status of women. Women make up about half of the population, and their empowerment is important for overall growth. The Hon. Prime Minister introduced the Pradhan Mantri Mudra Yojana (PMMY) on April 8, 2015, to lend up to 10 lakh rupees to small and microbusinesses that are neither farms nor corporations to end the capital funds crisis. Commercial banks, regional rural banks (RRBs), microfinance institutions (MFIS), small financing banks, non-banking financial firms (NBFCs), and other financial intermediaries distribute these loans. Improving people's quality of life and growing micro and small businesses are the primary objectives. The objective of the paper is to investigate the role of financial inclusion and women’s economic empowerment through Mudra yojana in promoting Atmanirbhar Bharat in rural Jharkhand.

The Impact of Artificial Intelligence (AI) Implementation on Islamic Financial Literacy and Global Economic Changes in the Banking World

Currently, the banking sector is facing a transformation towards the digital era in response to the development of fintech and the digital technology revolution. This transformation has brought banks into the era of digital banking services that aim to spread financial inclusion and provide access to the community without time and place constraints. Advances in information and communication technology have brought changes to various industries, including the Islamic finance sector. The development of artificial intelligence (AI) is crucial in the digitalization of Islamic money and offers opportunities to increase efficiency, personalize services, and reduce risks. This study aims to analyze the impact of AI implementation on financial literacy and global economic changes in the banking world by emphasizing effectiveness, efficiency, and compliance with Sharia principles. The research method used is qualitative literature research. Data comes from various sources, including relevant research papers, journals, and books. The findings of this study indicate that the application of AI in Islamic finance can improve operational efficiency, make financial services more accessible, and enable data analysis in a way that facilitates the development of strategic plans. However, the most important thing is to ensure that AI development complies with Sharia principles, including identifying riba, gharar, and non-halal transactions. The findings of this study highlight the importance of clear regulations to support the use of AI in Islamic finance, even if it is based on Islamic law. Through careful and innovative thinking, AI can serve as a strategic tool to enhance the Islamic banking sector in Indonesia, promote financial inclusion, and foster the country's economic growth.

Does FinTech enhance the effectiveness of financial inclusion to reduce income inequality? Evidence from Sub-Saharan Africa

Does FinTech enhance the effectiveness of financial inclusion to reduce income inequality? Evidence from Sub-Saharan Africa

The impact of digital inclusive finance on enterprise digital technology innovation: empirical evidence from the Chinese manufacturing industry

Enterprise digital technology innovation plays a crucial role in China’s scientific and technological revolution as well as industrial transformation, with digital inclusive finance emerging as a significant catalyst for such innovation and providing robust support for the stable development of the real economy. This study innovatively employs the GLM3 large language model and the BERT model to identify digital technology patents. Based on data from 3313 Chinese A-share manufacturing listed companies from 2011 to 2022, this research investigates the influence pathways and mechanisms through which digital inclusive finance impacts enterprise digital technology innovation. The findings indicate that digital inclusive finance positively drives enterprise digital technological innovation. Expanding the coverage of digital financial services is key to effectively enhancing enterprises’ digital innovation capabilities. Digital inclusive finance significantly boosts enterprise digital technological innovation by alleviating financing constraints and increasing R&D investment. The financial background of executives moderates this relationship negatively, while the intensity of financial regulation exhibits an inverted U-shaped moderating effect on the relationship between digital inclusive finance and enterprise digital technological innovation. The incentive effect of digital inclusive finance on enterprise digital technology innovation is more pronounced in central and western regions and non-state-owned enterprises. This paper proposes a new incentive mechanism to enhance the digital technology innovation capability of manufacturing enterprises, suggesting that relevant departments should accelerate the transformation of the financial regulatory system, construct a targeted, timely, and penetrating regulatory technology system, and effectively guide digital inclusive finance to inject new momentum into the development of enterprise digital technology innovation while preventing and resolving systemic risks.

Gender Gaps, Financial Inclusion and Social Integration in Kakuma Refugee Camp, Kenya

The integration or resettlement efforts aimed at self-reliance of refugees are requisite for their adaptation to social and economic shocks and consequently to their human development and contribution to economic growth. This study analyses the drivers of financial inclusion and social integration and estimates the respective gender gap among households in Kakuma Refugee Camp, Kenya. Based on a 2019 socio-economic survey dataset, the study constructs indices to reveal the extent of financial inclusion and social integration. Using the ordered logistic regression, factors such as earning wages, asset accumulation, food security, social capital, education, and access to information demonstrate significant explanatory power for financial inclusion and social integration. The Blinder-Oaxaca decomposition technique for measuring the gender gap reveals that women are significantly better off with respect to financial inclusion compared to men. These results suggest that gendered financial inclusive and social integration programs can build refugee self-reliance. Accordingly, government and development partners should promote gender-inclusive strategies for refugees in Kenya. This study contributes to the literature on refugee financial inclusion and social integration by offering gender-specific insights into their barriers and enablers in protracted displacement contexts.

Building Business Resilience Through Strategic Entrepreneurship: Evidence from Culinary Micro-Enterprises in Bandung During the COVID-19 Pandemic

This study analyzes the effect of knowledge managemet capability on entrepreneurial orientation, entrepreneurial finance, entrepreneurial marketing, and business resilience in culinary micro-enterprises in Bandung during the COVID-19 pandemic, proposing that knowledge management capability influences entrepreneurial orientation, entrepreneurial finance, and entrepreneurial marketing, which in turn enhance business resilience. Partial least squares structural equation modeling was used to analyze data from 125 culinary micro-enterprises. The findings show that entrepreneurial finance has a stronger effect on business resilience compared to other factors, indicating that financial agility and resource allocation are more important for business resilience in crisis conditions. This challenges the conventional view that innovation is the main driver of business resilience. This study redefines the strategic entrepreneurship model by highlighting the role of knowledge management capability as a key resource input in the resource orchestration process to build business resilience. The results offer practical insights, including policy recommendations for improving digital infrastructure and financial inclusion to support culinary micro-enterprises in adapting to future disruptions.

Technological Impact of Digital Payment Systems on Consumer Behavior and Optimization of the Cash Flow Conversion Cycle in Pakistan

This study aims to investigate the impact of digital payment system technology on consumer behavior and cash flow optimization in the context of the developing markets specifically in Pakistan. This study opts for a quantitative research approach and examines how the acceptance of digital payments changes spending behaviors and increases financial efficiency for businesses. Based on the Technology Acceptance Model (TAM), this study pinpoints determinants like ease of use, perceived usefulness, and social influence as major drivers in consumer adoption. The study reveals that digital payment adoption results in reducing cash conversion cycles that allow businesses to operate more efficiently and influence consumer spending behavior by increasing the value and frequency of transactions. Digital payment systems maintain a growing path that enables both financial inclusion advancements and economic growth-enabling factors within developing economies despite challenges with infrastructure and digital competence. The study provides the essential groundwork for policy recommendations that target both financial practitioners and policymakers who seek the development of digital financial systems.

Nexus of digital financial service adoption, decent work and environmental sustainability: results from SEM-NCA approaches

With growing global attention on sustainability, financial inclusion, and decent work, there remains a gap in understanding how financial literacy, access to capital, and digital payment usage impact both decent work and environmental sustainability, particularly in the context of developing economies. Existing research also overlooks the mediating role of decent work in bridging these factors with environmental sustainability. A sample of 384 valid responses was collected using convenience sampling from digital financial service users and providers. The data were analyzed using PLS-SEM to examine the direct and indirect relationships between the variables, and NCA was employed to assess the robustness and necessity of these factors in achieving decent work and environmental sustainability. The results show that financial literacy, access to capital, and digital payment usage positively affect both decent work and environmental sustainability. Moreover, decent work mediates the relationship between these financial inclusion factors and environmental sustainability, demonstrating its crucial role in achieving sustainable outcomes. The study contributes to the theoretical literature by integrating Capability Approach, Institutional Theory, and Stakeholder Theory to explain how financial inclusion and decent work contribute to environmental sustainability. This multi-theory framework enhances the understanding of the mechanisms through which financial inclusion influences sustainable development. This study adds value to the literature by extending financial inclusion research on decent work, environmental sustainability, and introducing mediating role of decent work in these relationships. The findings of this study provide valuable insights for policymakers to design inclusive financial strategies that promote decent work and foster environmental sustainability, contributing to broader development goals.

Corporate governance, COVID-19, and financial inclusion: insights from OECD countries

Corporate governance, COVID-19, and financial inclusion: insights from OECD countries

Exploring FinTech trends in Jordan: insights from the post-COVID-19 era

Purpose This study aims to investigate how the COVID-19 pandemic has impacted the growth of FinTech within the Jordanian context. Specifically, it examines the antecedent factors influencing users’ intentions to adopt and use FinTech services during this unprecedented period. Design/methodology/approach A quantitative research method approach with partial least squares-structural equation modelling was used to test the research proposed model. Findings The results of the structural path revealed that the drivers of behavioural intentions to use FinTech services are perceived usefulness, perceived self-efficacy, perceived vulnerability, subjective norms, perceived severity, perceived certainty and resistance to use and these factors explain 79.5% of the variance of behavioural intention. Research limitations/implications This study identifies key factors for FinTech acceptance in Jordan, offering actionable insights for policymakers and service providers. Building user trust in service and technology (security, effectiveness and transparency) is crucial, alongside leveraging social influence (testimonials, endorsements) and boosting awareness/knowledge through campaigns and educational initiatives. This study identifies key factors for FinTech acceptance in Jordan, offering actionable insights for policymakers and service providers. Building user trust in service and technology (security, effectiveness and transparency) is crucial, alongside leveraging social influence (testimonials, endorsements) and boosting awareness/knowledge through campaigns and educational initiatives. This study’s generalizability is limited by its sample, drawn from three Jordanian regions and dominated by potential users. Comparing actual and potential user perceptions, alongside including users from diverse contexts (e.g. other developing countries), could address this. In addition, using qualitative methods alongside the quantitative approach and exploring indirect relationships (mediating/moderating) would provide richer insights into FinTech acceptance in Jordan. Originality/value While prior research has explored FinTech adoption, including studies conducted in Jordan, this study makes several key contributions. Firstly, it specifically examines FinTech trends within the post-COVID-19 era in Jordan, a period marked by accelerated digital transformation and evolving user behaviours. Secondly, it extends existing models of FinTech adoption by incorporating “perceived self-efficacy, perceived vulnerability, subjective norms, perceived privacy, perceived severity, perceived value, perceived certainty and resistance to use”, in addition to the established factors of “perceived usefulness and ease of use”. This expanded model provides a more holistic understanding of the drivers and barriers to FinTech adoption in this context. Finally, this research provides empirical evidence from the Jordanian market, offering valuable insights for financial institutions and policymakers seeking to promote FinTech adoption and financial inclusion in a developing economy undergoing rapid digital change. This focus on the post-pandemic Jordanian context, combined with the extended theoretical model, offers a novel contribution to the literature.

Exploring the Influence of Economic Uncertainty, Financial Inclusion and Development on Green Investments in BRICS Economies Towards Achieving Sustainable Development Goals

Exploring the Influence of Economic Uncertainty, Financial Inclusion and Development on Green Investments in BRICS Economies Towards Achieving Sustainable Development Goals

Is Digital Literacy a Moderator Variable in the Relationship Between Financial Literacy, Financial Inclusion, and Financial Well-Being in the Ecuadorian Context?

Is Digital Literacy a Moderator Variable in the Relationship Between Financial Literacy, Financial Inclusion, and Financial Well-Being in the Ecuadorian Context?

Financial Inclusion and Effects of Mobile Money Within French and English-Speaking Countries in Sub-Saharan Africa

The past two decades have seen many governments, especially in the developing world acknowledging the importance of financial inclusion. It may be argued though, that the African continent has lagged behind. Nevertheless, the continent has begun to catch up, with studies indicating that over 75% of Africans hold a mobile phone with an internet connection that they use for mobile payments and e-commerce, among other things. The purpose of this paper is to establish the role of mobile money in financial inclusion, and if there is any difference between French and English-speaking countries in Sub-Saharan Africa. The study used the 2011 and 2021 Global Financial Index data collected by the World Bank for their report on financial inclusion across the world. General Linear Model and Binary Logistic Regression were employed to analyse data. The results revealed that while in 2011, before the widespread of mobile money, a significant proportion of English-speaking had inclusion and a significant proportion of French-speaking didn’t. The gap substantially narrowed within 10 years due a wider adoption of mobile money by the French-speaking countries. However, the overall financial inclusion increased substantially for both groups within that period. The originality of this study lies in the fact that studies on financial inclusion in Africa have not been comparing comprehensively the differences by countries’ colonial heritage, neglecting an important aspect which this study covered.

AI-Based Credit Scoring Models in Microfinance: Improving Loan Accessibility, Risk Assessment, and Financial Inclusion

AI has made a huge impact in micro financing through the introduction of credit scoring models that have made loans easily accessible, reduced risks associated with lending while increasing the number and population covered by micro finance. The key traditional credit scoring measures that form the basis of conventional credit scoring models mainly base their decision on historical financial data, thus locking out people who do not have formal records with banks in the society. Symbolic models apply new sources of data, like use of mobile phones, transactions, social media accounts, and biometric data to make new credit scores for borrowers. The application of machine learning models will enhance lending decisions at the microfinance institutions, lower costs of operations, and reduce default risks. Nevertheless, there are certain drawbacks that are associated with the use of big data; issues such as data privacy, algorithms bias, meeting regulatory requirements, and technical constraints for MFIs. This paper aims at reviewing the advancement in credit scoring in the microfinance market, the techniques used to couple credit assessment using Artificial Intelligence, and the concerns towards the ethical practice of deploying Artificial Intelligence. It also provides examples of good practice in AI adoption and explores the potential of AI to increase financial inclusion. Despite the benefits that may be brought about by AI in assisting the process of micro financing, it is crucial to ensure fairness, transparency, and responsible use of the technology in microfinance.

Will Digital Inclusive Finance Improve the Quality and Quantity of SMEs’ Green Innovation?

Whether SMEs can become a significant player in green innovation and reshape the green innovation landscape in China largely depends on their ability to effectively address the lack of momentum for green innovation among SMEs. Utilizing data from China’s SMEs listed on the growth enterprise market between 2011 and 2022, this study empirically examines the effects and underlying mechanisms of digital financial inclusion on green innovation in SMEs, considering both the financial market supply and corporate financing constraints. The results indicate that digital inclusive finance significantly enhances both the quantity and quality of green innovation in SMEs. Moreover, digital financial inclusion particularly improves the quality and quantity of green innovation in SMEs with strong ESG performance and high equity concentration, compared to those with weaker ESG performance and lower equity concentration. Heterogeneity analysis reveals that digital inclusive finance can improve the quality and quantity of state-owned enterprises and enterprises in the eastern region. Still, it has no significant impact on the quantity of green innovation for enterprises in the central and western regions. Regarding the impact mechanism, digital inclusive finance encourages SMEs to engage proactively in green innovation by mitigating financing constraints and increasing R&D investments. The findings of this paper not only reveal how SMEs can overcome the restrictive mechanisms of green innovation through digital inclusive finance, but also provide critical insights for improving the imbalance in the structure of green innovation within China.

Impact of National Innovation System on Digital Payment Systems in Mauritius

The study examines how the National Innovation System (NIS) impacted the development and adoption of digital payment technologies in the country. This system played a vital role in promoting financial inclusion, enhancing operational efficiency, and supporting economic growth. The research evaluated the current landscape of digital payments in Mauritius, focusing on factors like infrastructure, adoption trends, and regulatory frameworks. A mixed-methods approach was used, blending quantitative data collection with qualitative policy analysis. Quantitative data was gathered through questionnaires, while qualitative insights were obtained from analyzing relevant policy documents. This dual approach allowed for a comprehensive assessment of key elements that influenced digital payment systems. The analysis explored various factors, including government regulations by investigating how the legal and regulatory environment shaped digital payment adoption; capacity for innovation by assessing the ability of the country's innovation ecosystem to support the growth of digital payment solutions; technological infrastructure by examining the availability of the technological resources necessary for digital transactions; socio-economic influences by analyzing how societal and economic conditions, such as income levels and access to technology, affected adoption rates; and competitive landscape by considering how competition among digital payment providers impacted innovation and service delivery. The study identified both opportunities and challenges within Mauritius' NIS, offering suggestions for improvements to foster greater digital payment adoption. The findings underscored the importance of nurturing a robust innovation ecosystem to drive digital transformation and economic development in emerging economies like Mauritius, highlighting how innovation could support wider access to financial services and contribute to national growth.

Digital innovation at the intersection of financial inclusion and humanitarian aid: HesabPay’s journey in Afghanistan

Digital innovation at the intersection of financial inclusion and humanitarian aid: HesabPay’s journey in Afghanistan

Can the Development of Digital Inclusive Finance Curb Carbon Emissions?: A Spatial Panel Analysis for China Under the PVAR Approach

Achieving the goals of carbon peak and carbon neutrality is crucial for the balance of global economic development with carbon emissions reduction and ecological environment protection, which are essential for the sustainability of human development. Digital inclusive finance (DIF), as an emerging force capable of promoting economic growth and technological innovation, plays a significant role in curbing carbon emissions. By using the panel data of 30 provinces in China from 2011 to 2021 and employing the panel vector autoregression (PVAR) model, this study empirically investigates the impact of DIF on total carbon emissions (TCE) and carbon emission intensity (CEI) from the perspective of technological innovation. The results show that DIF significantly reduces TCE and CEI and can further decrease TCE and CEI by promoting the level of technological innovation. The results of the impulse response function (IRF) reveal that technological innovation has a more significant and volatile impact on CEI compared to its effect on TCE. Moreover, heterogeneity analysis suggests that the impact of DIF on the reduction in carbon emissions is characterized by regional heterogeneity, with the impact of DIF on TCE in the central regions being the most pronounced, significantly influenced by the spillover effects from the eastern regions. Further research finds that the western regions exhibit a more significant impact of technological innovation levels on CEI compared to the eastern regions, with a discernible trend towards the convergence of inter-provincial disparities in CEI in the process of development.

Regulatory and Ethical Challenges in AI-Driven and Machine learning Credit Risk Assessment for Buy Now, Pay Later (BNPL) in U.S. E-Commerce: Compliance, Fair Lending, and Algorithmic Bias

The integration of artificial intelligence (AI) and machine learning (ML) in credit risk assessment for Buy Now, Pay Later (BNPL) services has transformed the U.S. e-commerce landscape. However, these advancements present significant regulatory and ethical challenges, particularly regarding compliance, fair lending practices, and algorithmic bias. This study examines the legal framework governing BNPL credit assessments, including adherence to the Equal Credit Opportunity Act (ECOA), Fair Credit Reporting Act (FCRA), and other consumer protection regulations (Federal Trade Commission [FTC], 2022; U.S. Consumer Financial Protection Bureau [CFPB], 2023). Additionally, the paper explores the implications of algorithmic bias in AI-driven credit decisions, highlighting the potential for disparate impacts on marginalized communities (Bartlett et al., 2022; Bragg, 2021; Zarsky, 2016). The ethical concerns surrounding transparency, explain ability, and consumer rights are also discussed (Kroll et al., 2017; Pasquale, 2020). A comparative analysis of current regulatory approaches and proposed reforms is conducted, with a focus on mitigating bias and ensuring equitable access to credit. This research concludes with recommendations for policymakers, regulators, and financial technology firms to foster responsible AI deployment in BNPL services while safeguarding consumer protection and financial inclusion.

Exploring Digital Banking and Financial Services Inclusivity: A Study of Social Media Interactions in an Online Community

The study explores the role of digital banking and financial services (DBFS) in enhancing financial inclusivity through social media interactions within an online community. It highlights how innovations like mobile technology have significantly improved financial inclusion, particularly in the Philippines. The research focuses on a Facebook group discussing digital banking, aiming to understand user perceptions of accessibility, usability, trust, security, financial literacy, and inclusivity. Key findings reveal that user-friendly interfaces and accessibility features are crucial for adoption. At the same time, trust and security concerns are prevalent but mitigated through shared experiences and reassurances within the community. Financial literacy is enhanced through exchanging advice and user guides, and inclusivity is promoted by providing opportunities for previously unbanked individuals. The study also emphasizes the importance of continuous improvement in digital infrastructure and financial literacy to ensure equitable access to digital financial services. By analyzing social media content and conducting interviews, the research offers valuable insights into how online communities can foster digital inclusivity in banking. It underscores the need to address challenges such as the digital divide and data privacy concerns to maintain consumer trust and ensure that all individuals, regardless of socio-economic status, can benefit from digital banking and financial services advancements.