Digital Financial Inclusion and Farmers’ Vulnerability to Poverty: Evidence from Rural China
By Xue Wang, Guangwen He. 2020
158 citations recorded by the source corpus.
Access to finance is often cited as a key factor for sustainable poverty alleviation, but expanding access to the poor remains an important challenge for financial institutions. Much hope has, therefore, been placed in the transformative power of digital financial inclusion. However, evidence on the relationship between digital financial inclusion and poverty is limited. This paper is one of the first attempts to study the effects of digital financial inclusion on farmers’ vulnerability to poverty in China, using survey data on 1900 rural households. Vulnerability to poverty, here defined as the likelihood of poverty in the future, is measured by the Asset-Based Vulnerability model. In our survey, the proportion of farmers using digital financial services is 35.63%. Our estimations show that farmers’ use of digital financial services have positive effects on reduction in their vulnerability. We also find that such effects rely mainly on improvement in farmers’ ability to cope with risk, that is, alleviating their vulnerability induced by risk. Further investigation reveals that digital financial services provided by ICT companies have a larger impact on farmers’ vulnerability than that provided by traditional banks. The lessons learned from China’s digital financial inclusion is valuable for other developing countries where financial exclusion looms large.
Subfields: Business and International Management, Economics and Econometrics, Management Information Systems
View Paper: https://www.semanticscholar.org/paper/572e7e7ea66c3ce51035cfdf4d9464468991cda8
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Citations in the corpus
- Industry 4.0 in Finance: The Impact of Artificial Intelligence (AI) on Digital Financial Inclusion (2020, unknown): “…have access to various online shopping platforms and various online social networks which produces a large amount of information on individuals which will help to do away with the problem of information asymmetry between financial institutions and individuals (Wang and He 2020; Yang and Zhang 2020).”
- Artificial Intelligence in the Industry 4.0, and Its Impact on Poverty, Innovation, Infrastructure Development, and the Sustainable Development Goals: Lessons from Emerging Economies? (2021, background): “M-Pesa is a mobile banking service lunched in 2007 by Safaricom the largest mobile phone operator in Kenya that allows users to store and transfer money through their mobile phones.”