Financial Inclusion Research Articles

Advancing financial inclusion through digital payment platforms in emerging markets

Advancing financial inclusion in emerging markets has become a critical focus for economic development, and digital payment platforms are playing a transformative role in this process. These platforms offer a scalable solution to bridge the gap between the unbanked population and formal financial services, enabling individuals and businesses to access affordable and secure financial products. The rise of mobile technology and widespread internet penetration have provided the infrastructure for digital payments to thrive, particularly in regions where traditional banking systems are underdeveloped. Key enablers include mobile money services, fintech innovations, and supportive regulatory frameworks that promote adopting digital financial solutions. Digital payment platforms facilitate faster, more efficient transactions, reduce the reliance on cash, and open up opportunities for marginalized groups, including women and small business owners, to participate in the formal economy. They also enhance financial literacy by offering accessible financial education tools, which empower users to manage their finances more effectively. However, challenges such as limited digital literacy, regulatory barriers, cybersecurity risks, and the digital divide must be addressed to maximize the potential of these platforms. Emerging markets have witnessed significant success stories, particularly in Africa and Southeast Asia, where mobile money platforms like M-Pesa and GCash have expanded financial access to millions. These platforms contribute to financial inclusion and stimulate economic growth by integrating more people into the financial system. Moving forward, collaborative efforts between governments, private sector stakeholders, and development organizations are essential to ensuring that digital payment platforms continue to drive financial inclusion sustainably and equitably.. Keywords: Financial Inclusion, Digital Payment Platforms, Emerging Markets, Mobile Money, Fintech, Unbanked Population, Economic Development, Financial Literacy, Digital Financial Services, Mobile Technology.

The Influence of Financial Literacy, Digital Literacy, and Social Capital on Digital Bank Financial Inclusion through Ease of Use an Intervening Variable

The growth of internet users in Indonesia has experienced a significant increase year by year, reaching 78.19% of the total population in 2022-2023. This indicates a broader penetration of the internet among Indonesian society. The national digital banking transaction value shows an increasing trend, reaching Rp5,098.6 trillion in August 2023, reflecting the growing adoption of digital financial services in Indonesia. This increase is supported by the ease of access offered by banks and online financial management, in line with the preferences of the digital era's growing generation, thus Generation Z quickly and comfortably adopts digital banking services. This brings the potential for greater financial inclusion among the younger generation.This study employed a quantitative approach with a causal purpose, applying the Technology Acceptance Model (TAM), Theory of Planned Behavior (TPB), and Theory of Reasoned Action (TRA). The dependent variable (financial inclusion), the intervening variable (ease of use), and the independent variables (financial literacy, digital literacy, and social capital). This study, which includes 200 Bandung City-based Generation Z digital bank customers, uses the Structural Equation Model (SEM) based on Partial Least Square (PLS) as its analytical tool. The study's findings demonstrate that Generation Z's digital bank customers in Bandung City already have very high levels of social capital, financial inclusion, digital literacy, and ease of use. Furthermore, it was shown that the effects of digital literacy, social capital, and financial literacy on financial inclusion might be moderated by simplicity of use. Financial inclusion is also significantly impacted directly by social capital, digital literacy, and financial literacy. It is intended that this research will provide a greater understanding of the variables impacting Generation Z's financial inclusion and how those characteristics may affect policies aimed at boosting the availability and use of financial services in the digital age.

The Nexus of Crowdfunding and e-Wakaf to Islamic Fintech in Indonesia in the Era of Industrial Revolution 5.0

This study analyses the contribution of digitalisation in Islamic finance through the application of Islamic crowdfunding and e-wakaf instruments in supporting the development of Islamic fintech in Indonesia, especially in the era of the Industrial Revolution 5.0. Digitalisation in the Islamic finance sector plays a strategic role in expanding access to financial inclusion and facilitating more effective community involvement in sharia-based economic activities. Using the Robust Least Squares (RLS) method, this study utilises secondary data for the period 2018 to 2023 to evaluate the impact of Islamic crowdfunding and e-wakaf on the growth of Islamic fintech. The results show that Islamic crowdfunding significantly expands access to alternative funding, especially for small and medium enterprises (SMEs), while e-wakaf improves transparency and efficiency of waqf asset management through digital technology. These two instruments simultaneously contribute positively to the strengthening of the Islamic fintech ecosystem in Indonesia, creating a strong foundation for broader and sustainable financial inclusion. The findings provide important perspectives for the development of innovative policies and strategies in advancing the Islamic financial sector in the digital era.

Exploring encounters and prodigies of Islamic banks in non-Muslim states: towards enhancing regulatory frameworks of Islamic banking system

Purpose The primary aim of this study is to explore challenges and prospects of Islamic banking system in non-Muslim states to foster regulatory frameworks of the system. Design/methodology/approach Content analysis as an integral part of qualitative research was used. Secondary data through the exploration of cursory literature was taken into consideration. Findings The findings identified three prime challenges, namely, regulatory, operational and institutional, which are impeding the smooth activities and performances of Islamic banks in using innovative Islamic products and services that can favourably compete with products and services of conventional banking system in non-Muslim states. In addition, strengthening the adoption and performance of Islamic banking in non-Muslim states can efficiently and effectively address the identified and multifarious regulatory, operational and institutional challenges to achieve financial inclusion and overall economic growth. Research limitations/implications Challenges encountered and prodigies or potentials of operating Islamic banking system by most of non-Muslim countries remains a pivotal aspect that needs research attention in the recent. Practical implications Nonetheless, the limitation of this study is that the study relies on the use of secondary data. However, it has provided a substantial direction for future studies in empirically exploring the variables of this study. Social implications Indeed, 19th century was a remarkable turning point in the development and expansion of Islamic banking system in the Muslim world. Many predominant Muslim countries such as Malaysia, Indonesia, Saudi Arabia, Bangladesh, Pakistan, among others have been efficiently and effectively operating Islamic banking system within the framework of Islamic legal provisions. Many non-Muslim countries such as Australia, the UK, USA, etc., have also adopted Islamic banking system. Originality/value It is noted that policy directions of the study among others should address the regulatory frameworks that is Shari’ah-compliant in the operation of Islamic banking system in non-Muslim states. It is therefore suggested that the policymakers, Islamic financial experts and regulators should use the innovation that could bring competitiveness into the operation of Islamic banking system in non-Muslim states.

AI-Driven Personalization in Financial Services: Enhancing Customer Experience and Operational Efficiency

This article explores how emerging technologies are influencing personalization in the financial services sector. Personalized services enhance customer experience and promote financial inclusion. By leveraging big data and AI, financial institutions can collect and analyze customer data to offer tailored services. AI-driven analytics provide real-time insights for financial modeling, risk management, and automation. The integration of machine learning structures in financial services to meet individual customer needs, ensuring product customization. Emerging technologies promise greater accuracy and personalization, driving better financial outcomes within the industry. This technological advancement is crucial for the modern financial landscape, enhancing performance and customer satisfaction.

Organizational learning and boundary spanners’ agility in the financial inclusion in Indonesia

This study examines the influence of organizational learning and boundary spanner agility in the bank agent business of Indonesia’s financial inclusion. This study is based on quantitative studies of 325 bank agents in Indonesia. The results of this research strongly show that organizational learning has a significant impact on boundary spanners’ agility to achieve both financial and non-financial performance. This study presents a novel finding that organization learning with a commitment to apply and encourage learning activities and agility with improved responsiveness and resilience boundary spanners can achieve bank agent performance. Organizational learning of bank agents needs to improve commitment to apply and encourage learning activities, always be open to new ideas, and create shared vision and knowledge transfer mechanisms. Organizational agility in bank agents need also to improve the capability to be more responsive and adaptable to culture changes in a volatile environment. This research provides valuable insights to policymakers, banking supervisors, bank top management teams, and researchers on the factors that may improve the effectiveness of the agency banking business to promote financial inclusion. Participating banks in the agent banking business need to set a clear vision, scope, and priority of strategy to encourage organizational learning and agility.

Integrating mental health and psychosocial support into economic inclusion programming for displaced families in Ecuador

BackgroundPoverty is a key social determinant of mental health among forcibly displaced persons. This study aimed to design and pilot test a strategy to integrate existing mental health and economic inclusion interventions for displaced families in Ecuador.MethodsWe conducted a series of qualitative interviews (n = 30), focus groups (n = 6), and workshops (n = 3) to develop a set of strategies for integrating cross-cutting and focused mental health and psychosocial support (MHPSS) strategies into an existing economic inclusion program for displaced families in Quito. We non-randomly assigned two field offices in Quito to (1) integrate cross-cutting strategies focused on improving economic outcomes or (2) integrate both those cross-cutting strategies plus focused MHPSS strategies into an economic inclusion program. We measured site-level implementation outcomes (adoption, appropriateness, acceptability, feasibility, fidelity, reach, retention, usability) and participant-level psychosocial (wellbeing, depressive symptoms, anxiety symptoms, functioning) and economic inclusion outcomes (financial resources, diet diversity, social capital/networks, self-reliance) over six months. We conducted a mixed-methods analysis to explore the acceptability and feasibility of the integration strategies and the ability to evaluate their effects in a future cluster randomized trial.ResultsWe developed a toolkit that included 10 strategies for integrating MHPSS into economic inclusion interventions. Fifty displaced persons participating in an existing economic inclusion program (25 per study condition) were enrolled and 88% remained in the study through the six-month follow-up. Participants and implementers reported that the integration strategy was appropriate, acceptable, feasible, and usable. Implementers, including people without prior experience in delivering mental health services, were able to deliver the intervention with high fidelity. Integration of focused MHPSS intervention components into an economic inclusion program appeared to improve MHPSS outcomes, the strength of social capital and networks, and engagement in economic and other programs.ConclusionsThis study provides preliminary evidence of the acceptability and feasibility of integrating MHPSS into economic inclusion programs for displaced people. We found evidence supporting evaluation methods that can be employed in a future study to definitively test the added value of integrated approaches to mental health and economic wellbeing for displaced persons.

Digital Financial Inclusion and Inclusive Growth ––Empirical evidence based on the China Household Panel Survey

As an innovation in traditional inclusive finance, digital inclusive finance is an important way to coordinate the income gap between urban and rural areas, popularize financial products and services, and promote the digitalization process. Therefore, this study matches the digital inclusive finance index with the Chinese household tracking survey, uses a panel data econometric model, a mediation effect model, and a moderation effect model to control for the characteristics of heads of households and families, and explores the impact mechanism of the development of digital inclusive finance on inclusive growth in urban and rural areas in China, with a view to providing a scientific basis and policy suggestions for promoting inclusive growth. The study finds that: First, digital inclusive finance has a significant income-increasing effect on both urban and rural households, among which it has a greater impact on rural households, which is conducive to narrowing the income gap between urban and rural areas; Second, digital inclusive finance improves rural household income and narrows the income gap between urban and rural areas by promoting rural household entrepreneurship and business activities and alleviating the formal credit constraints of rural households; Third, digital inclusive finance can generally promote families with access to the Internet, a strong ability to use digital tools, and small information constraints to start businesses and obtain formal credit. This study innovatively incorporates entrepreneurial quality into the research of the transmission mechanism; three theories of the "digital divide" are put forward and tested. Research value: Clarifying the transmission mechanism of digital inclusive finance to promote inclusive growth, and providing policy suggestions for the development of digital inclusive finance.

INNOVATIVE MACHINE LEARNING APPROACHES TO FOSTER FINANCIAL INCLUSION IN MICROFINANCE

This study examines the application of machine learning algorithms to enhance financial inclusion in microfinance, focusing on credit scoring, risk and fraud detection, and customer segmentation. We performed feature engineering and employed models such as Logistic Regression, Decision Trees, Random Forests, Gradient Boosting Machines (XGBoost and LightGBM), Support Vector Machines (SVM), Autoencoders, Isolation Forests, and K-means Clustering. LightGBM achieved the highest accuracy (89.6%) and AUC (0.92) in credit scoring, while Random Forests demonstrated strong performance in both loan approval (86.7% accuracy) and fraud detection (87.6% accuracy, AUC of 0.88). SVM also performed competitively, and unsupervised methods like Autoencoders and Isolation Forests showed potential for anomaly detection but required further refinement.K-means Clustering excelled in customer segmentation with a silhouette score of 0.72, enabling tailored services based on client demographics. Our findings highlight the significant impact of machine learning on improving credit scoring accuracy, reducing fraud risks, and enhancing customer service delivery in microfinance, thereby promoting financial inclusion for underserved populations. Ethical considerations and model interpretability are crucial, particularly for smaller institutions. This study advocates for the broader adoption of machine learning in the microfinance sector.

Can digital financial inclusion promote the nighttime economy? - New evidence from Chinese counties’ nighttime lighting data and threshold model

In the post-pandemic era, the relative weakness of the economy is reflected not only in the macro data but also in the nighttime economy. Based on the threshold model and unbalanced panel data of 1772 county-level administrative units in China from 2014 to 2020, this paper deeply explores the relationship between digital inclusive finance and night economy and draws the following conclusions. (1) When digital financial inclusion exceeds certain thresholds, its beneficial influence on promoting the nighttime economy increases from 8.13% to 26.59% and 87.71%. (2) Digital financial inclusion promotes the nighttime economy by increasing employment in the secondary industry and promoting technological innovation. However, digital financial inclusion hinders the nighttime economy by reducing entrepreneurial activity in the accommodation and catering sectors. (3) Coverage breadth first inhibits, then promotes, and inhibits the nighttime economy in different intervals; the effect of usage depth and digital level on the nighttime economy in intervals shows an increasing trend. (4) In the Yangtze River Economic Belt region, digital financial inclusion initially inhibits the nighttime economy but turns into promotion as it develops; after the implementation of the rural revitalization strategy in 2017, digital financial inclusion can more positively and significantly promote the nighttime economy.

Women’s Investment Decision: An Examination of Risk Tolerance and Financial Literacy

“This study investigates the impact of Digital Financial Literacy (DFL), Access to Technology (AT), and Socioeconomic Status (SES) on Financial Decision-Making (FDM). Using a sample of 147 participants, the research employs regression analysis to reveal significant positive relationships between DFL, AT, and SES with FDM. Findings indicate that higher levels of digital financial literacy and improved access to technology enhance individuals' ability to make informed financial decisions. Furthermore, SES is shown to play a crucial role in shaping financial behavior. The study's insights underscore the need for targeted educational initiatives and policies aimed at improving digital financial literacy, particularly among economically disadvantaged populations. This research contributes to the understanding of factors influencing financial decision-making and offers recommendations for stakeholders aiming to foster financial inclusion in an increasingly digital landscape.”

Examining the Impact of Digital Inclusive Finance on Urban and Rural Consumption Patterns: Insights from China Household Finance Survey in 11 Coastal Regions

Examining the Impact of Digital Inclusive Finance on Urban and Rural Consumption Patterns: Insights from China Household Finance Survey in 11 Coastal Regions

Impact of financial inclusion, financial stability, bank nonperforming loans, inflation, macroeconomic management quality and unemployment on economic growth in Nigeria

PurposeThe study investigates the impact of financial inclusion, financial stability, bank nonperforming loans, inflation, macroeconomic management quality and the unemployment rate on economic growth in Nigeria.Design/methodology/approachThe data are analyzed using the ordinary least squares regression, generalized linear model regression, robust least squares regression and the quantile regression methods. The sample period is from 2007 to 2022.FindingsFinancial inclusion, inflation rate and macroeconomic management quality are significant determinants of economic growth in Nigeria. Bank nonperforming loans, unemployment rate, international trade and climate change have an insignificant effect on economic growth in Nigeria. Also, financial inclusion, inflation rate, financial stability, macroeconomic management quality and the unemployment rate are significant determinants of economic growth in good economic years in Nigeria.Practical implicationsThe well-known catalysts of economic growth, such as financial inclusion and financial stability, are not positive catalysts of economic growth in Nigeria during good economic years. Therefore, it is recommended that policymakers should find the right level of financial inclusion, financial stability and unemployment that stimulate economic growth in Nigeria.Originality/valueThis study examines some determinants of economic growth in Nigeria which have not been examined in the existing literature.

Study of Financial Digitalization for the Sharia Economy

This research discusses the urgency or importance and potential that can be explored from the study of financial digitalization for the sharia economy. Digitalization of sharia economic finance is very important in the digital economic era as an effort to increase public awareness and participation in the sharia financial system, as well as increasing sharia economic growth in Indonesia, where information and communication technology has become the main means of developing the sharia economy. The urgency of studying financial digitalization for the sharia economy lies in the ability of digital technology to increase access to sharia finance and increase public awareness about the importance of the sharia financial system. This research also shows that digitizing Islamic economic finance can help increase financial inclusion, as well as increase people's ability to manage their finances effectively. The method used in this research is a qualitative method, where this research method is supported by secondary data sourced from scientific writings both from journals, digital literature, books and articles published by mass media related to the research topic discussed so that it can then explain what the answer is to the problem formulation in this research. This research shows that the study of financial digitalization for the sharia economy is very important to increase public awareness and participation in the sharia financial system, as well as increasing sharia economic growth in Indonesia

Migration experience and risky financial assets investments of county households: evidence from China

Enhancing the support for inclusive finance in county economies is crucial in achieving the strategic goal of building financial power. Drawing upon the theoretical lens of county-level inclusive financial accessibility, this study examines the effect of the migration experience (ME) of county socialites on their risky financial assets investment (FAI) and the underlying mechanisms. We utilize data sourced from the County Consumption Survey, a nationwide effort by the Department of Sociology of Tsinghua University and the 58 Tongzhen Research Group. Our findings reveal that the ME of county socialites significantly boosts their likelihood of engaging in financial markets. Furthermore, housing inequality factors, such as housing property rights and housing loans, play a moderating role in the impact of individual ME on their FAI. Additionally, the financial concept has a masking effect rather than a mediating effect on the path of the ME affecting FAI. Notably, the promotion effect of ME displays heterogeneity. Specifically, ME has a stronger positive effect on FAI among college-educated groups, members of the Communist Party of China (CPC), and urban hukou residents than on those who have not completed college education, non-CPC members and rural hukou households. In light of these findings, we propose policy recommendations to optimize the distribution of financial services, adjust the housing equality policy, and enhance inclusive financial literacy.

Machine learning, banking, industry, digitalization, innovation

Aim: The application of artificial intelligence (AI) offers an encouraging avenue for developments in the banking industry. Methods: The study adopted a scoping review of methodology to provide a comprehensive overview of relevant research regarding the potential uses and challenges of AI in banking. Consumer expectations have evolved, emphasizing features such as payment gateways, swift transactions, and resilient banking services. Results: Major utilization of the AI in banking industry includes enhanced customer engagement, satisfaction, and relationships, personalized financial guidance, smart digital wallets, regulation compliance and collaborative efforts, forecasting, tracking market trends, decision-making and problem-solving, anti-money laundering and fraud detection, automation of repetitive, large and time-intensive tasks, enhanced cybersecurity, and opportunity for digital financial inclusion. Conclusion: Users encounter challenges involving security issues, privacy concerns, and the complexity of technology in AI-driven banking services. Recommendation: While AI holds a crucial role in the banking industry, successful implementation demands ample allocation and consistent, predictable utilization of AI practices.

Moderating Role of Technology Self-Efficacy on Fintech Usage and Digital Financial Inclusion of Women in Rural Uganda

Digital financial inclusion (DFI) especially among rural women remains a significant challenge in Uganda. Despite the potential benefits of fintech’s, limited technology self-efficacy (TSE) among rural women hampers their effective usage. This study examined how TSE influences the relationship between fintech usage and DFI among these women. Data were gathered via a structured questionnaire from 384 women vendors in Mbale main market, employing an explanatory, quantitative, cross-sectional design. Using hierarchical regression and Hayes PROCESS Macro V 4.0, the study assessed both direct relationships and the moderating effect of TSE. Results indicate that both fintech usage and TSE positively impact DFI, with TSE significantly enhancing the association between fintech usage and DFI. Based on these findings, the study recommends that policymakers support fintech adoption through targeted education programs to improve TSE among rural women. Additionally, user-friendly interfaces and supportive systems are crucial in overcoming technological barriers and boosting confidence. However, limitations include the study’s cross-sectional approach, focus on women vendors in a specific district, and potential social desirability bias. Future research should consider longitudinal studies, cultural aspects of fintech adoption, and mixed-methods data collection to deepen understanding of the variables.

Pengaruh Inklusi Keuangan dan Pengelolaan Keuangan Terhadap Kinerja UMKM di Desa Rengasdengklok Utara

This study aims to analyse the impact of financial inclusion and financial management on SMEs. Financial inclusion refers to SMEs' access to financial services, while financial management encompasses the practices of managing funds and the effective use of capital. The unit of analysis for this research is SMEs in the village of Rengasdengklok Utara, with data collection conducted through the distribution of questionnaires. A sample of 65 respondents was targeted, but data was obtained from 58 respondents, with sampling conducted using purposive sampling technique. The analysis technique used is multiple linear regression analysis, which is a statistical method to determine the relationship between dependent and independent variables. This is because improved financial inclusion and financial management can enhance the overall performance of SMEs; financial inclusion provides financial access to business actors, while effective financial management can optimise the use of funds, thus these two factors can improve SME performance. For future researchers conducting similar studies, it is suggested that the sample size be larger and the data distribution more extensive. Furthermore, it is recommended to investigate variables such as social capital, financial technology, and more, to identify other factors that may influence SME performance..

Pemberdayaan Ekonomi Perempuan Melalui Program Bank BTPN Syariah: Studi Literatur

The aim of this research is to find out whether financial inclusion has an effect on the stability of sharia banking in Indonesia using the Generalized Least Square (GLS) method. To measure the financial stability of Islamic banking, the inclusion variable contains MSMEs and Deposits, while the stability variable used is NPF. The research method used in this research is quantitative descriptive with the help of the Generalized Least Square (GLS) method which corrects problems in the classical assumption test, which is tested based on Eviews 12 with panel time series data. The research results show that the independent variable MSMEs has a significant effect on NPF. The independent variable Deposits has a significant effect on NPF. Reliability UI results using the F test for the MSME and Deposit variables together have an effect on NPF.

Digital inclusive finance and digital transformation of Chinese enterprises: Perspectives on company technology intensity and financialization

AbstractThis study explores the role of digital inclusive finance in company digital transformation within China, particularly examining the variances among companies with differing levels of technological intensity and financialization. Using A‐share Chinese data from 2011 to 2022, we find that regions with superior digital inclusive finance exhibit enhanced corporate digital transformation, regardless of the provincial or municipal level. Subindexes, including the coverage breadth, use depth, and degree of digital inclusive finance, confirm that they are all significantly positively related to digital transformation. These effects are more pronounced in companies with lower technological intensity, and corporate financialization serves as a mediating factor.