Sage Journals: Discover world-class research

Abstract

Financial services, credit to technological development, have witnessed significant transformation in the last few decades in terms of efficiency improvement and increased access to financial services. It is strongly perceived that the use of technology will make financial services reach unbanked and underbanked people at their doorstep. Therefore, this study is conducted to examine the impact of financial technology (FinTech) on financial inclusion through the systematic literature review approach. Research studies published from 2004 to 2022 on the theme are covered in this study. This Study uses population, intervention, comparison, outcomes and context (PICOC) strategy, identifying the population such as ‘Fintech’ in the context of ‘financial inclusion’. The research reveals that FinTech has improved financial inclusion through use the of mobile money, digital lending and has reduced cost, income inequality and risk reduction which in turn has helped in the economic growth of the country. This study highlights that digital lending is the most under-researched parameter among the four. This study also highlights the challenges faced by various countries in the adoption and usage of FinTech, which has major implications for policymakers, government authorities, technological developers and banking regulations.

JEL: O33

Keywords

FinTech financial inclusion systematic reviews

Get full access to this article

View all access options for this article.

References

Abu Daqar

M. A. M.

, Arqawi

, & Karsh

S. A.

(2020). Fintech in the eyes of Millennials and Generation Z (the financial behavior and Fintech perception). Banks and Bank Systems , 15(3), 20–28. https://doi.org/10.21511/bbs.15(3).2020.03

Al-Okaily

, Al Natour

A. R.

, Shishan

, Al-Dmour

, Alghazzawi

, & Alsharairi

(2021). Sustainable FinTech innovation orientation: A moderated model. Sustainability , 13(24), https://doi.org/10.3390/su132413591

Ali

S. A.

(2022). Crowdfunding platforms as a substitute financing source for young Saudi entrepreneurs: Empirical evidence. SAGE Open , 12, 1–14.

Allaymoun

M. H.

, & Hamid

O. A. H.

(2020). Proposed mobile application for Islamic Fintech E-Salam System: An approach to the financial inclusion. In 2020 International Conference on Data Analytics for Business and Industry: Way Towards a Sustainable Economy, ICDABI 2020 . https://doi.org/10.1109/ICDABI51230.2020.9325698

Arner

D. W.

, Buckley

R. P.

, Zetzsche

D. A.

, & Veidt

(2020). Sustainability, FinTech and financial inclusion. European Business Organization Law Review , 21(1), 7–35. https://doi.org/10.1007/s40804-020-00183-y

Baber

(2020). Financial inclusion and FinTech: A comparative study of countries following Islamic finance and conventional finance. Qualitative Research in Financial Markets , 12(1), 24–42. https://doi.org/10.1108/QRFM-12-2018-0131

Baber

(2021). Financial inclusion and crowdfunding—A study of European countries. Review of Applied Socio-Economic Research , 22(2), 37–48. doi: 10.54609/reaser.v22i2.104

Baldock

R. O.

, & Mason

(2017). The role of government co-investment funds in the supply of entrepreneurial finance: An assessment of the early operation of the UK angel co-investment fund. Environment and Planning C: Government and Policy , 35(3), 434–456. https://doi.org/10.1177/0263774X16667072

Banna

, & Alam

M. R.

(2021). Impact of digital financial inclusion on ASEAN banking stability: Implications for the post-Covid-19 era. Studies in Economics and Finance , 38(2), 504–523. https://doi.org/10.1108/SEF-09-2020-0388

10.

Banna

, Mia

M. A.

, Nourani

, & Yarovaya

(2022). Fintech-based Financial Inclusion and Risk-taking of Microfinance Institutions (MFIs): Evidence from Sub-Saharan Africa. Finance Research Letters , 45, 102149. https://doi.org/10.1016/j.frl.2021.102149

11.

Burns

(2018). M-Pesa and the “Market-Led” Approach to Financial Inclusion. Economic Affairs , 38(3), 406–421. https://doi.org/10.1111/ecaf.12321

12.

Campbell-Verduyn

, Rodima-Taylor

, & Hütten

(2021). Technology, small states and the legitimacy of digital development: combatting de-risking through blockchain-based re-risking? Journal of International Relations and Development , 24(2), 455–482. https://doi.org/10.1057/s41268-020-00198-5

13.

Chinoda

, & Mashamba

(2021). Fintech, financial inclusion and income inequality nexus in Africa. Cogent Economics and Finance , 9(1). https://doi.org/10.1080/23322039.2021.1986926

14.

Coffie

C. P. K.

, Hongijiang

, Mensah

I. A.

, Kiconco

, & Simon

A. E. O.

(2020). Determinants of FinTech payment services diffusion by SMEs in Sub-Saharan Africa: Evidence from Ghana. Information Technology for Development , 0(0), 1–22. https://doi.org/10.1080/02681102.2020.1840324

15.

Coffie

C. P. K.

, Hongijiang

, Mensah

I. A.

, Kiconco

, & Simon

A. E. O.

(2021). Determinants of FinTech payment services diffusion by SMEs in Sub-Saharan Africa: Evidence from Ghana. Information Technology for Development , 27(3), 539–560. https://doi.org/10.1080/02681102.2020.1840324

16.

Coffie

C. P. K.

, Zhao

, & Mensah

I. A.

(2020). Panel econometric analysis on mobile payment transactions and traditional banks effort toward financial accessibility in sub-Sahara Africa. Sustainability (Switzerland) , 12(3), 1–20. https://doi.org/10.3390/su12030895

17.

Correa

J. C.

, Dakduk

, Woude

D. V. D.

, Sandoval-Escobar

, & Lopez-Llamas

(2022). Low-income consumers’ disposition to use automated banking services. Cogent Business & Management , 9(1). https://doi.org/10.1080/23311975.2022.2071099

18.

Croxson

, Frost

, Gambacorta

, & Valletti

(2022). Platform-based business models and financial inclusion [BIS Working Papers No. 1–30]. Available at: https://www.bis.org/publ/work986.pdf

19.

Demir

, Pesque-Cela

, Altunbas

, & Murinde

(2020). Fintech, financial inclusion and income inequality: A quantile regression approach. European Journal of Finance , 4364. https://doi.org/10.1080/1351847X.2020.1772335

20.

Demirgüç-Kunt

, Klapper

, & Hess

(2020). The Global Findex Database 2017: Measuring financial inclusion and opportunities to expand access to and use of financial services. World Bank Economic Review , 34(2018), S2–S8. https://doi.org/10.1093/wber/lhz013

21.

Deng

, Lv

Yongbin

, Liu

, & Zhao

(2021). Impact of fintech on bank risk-taking: Evidence from China. Risks , 9(5). https://doi.org/10.3390/risks9050099

22.

Dwivedi

, Alrasheedi

, Dwivedi

, & Staresinic

(2022). Leveraging financial inclusion through technology-enabled services innovation: A case of economic development in India. International Journal of E-Services and Mobile Applications , 14(1), 1–13. https://doi.org/10.4018/IJESMA.289633

23.

Fernández-Olit

, Martín Martín

J. M.

, & Porras González

(2020). Systematized literature review on financial inclusion and exclusion in developed countries. International Journal of Bank Marketing , 38(3), 600–626. https://doi.org/10.1108/IJBM-06-2019-0203

24.

Gichuru

, & Namada

J. M.

(2022). Regulatory requirements and financial inclusion in FinTech companies. International Journal of Applied Management Theory and Research , 4(1), 1–13. https://doi.org/10.4018/ijamtr.300345

25.

Gopalan

, & Rajan

R. S.

(2021). Does digital financial inclusion moderate or exacerbate output volatility? Applied Economics Letters . https://doi.org/10.1080/13504851.2021.1963400

26.

Guo

, Chen

, & Zeng

(2021). Does Fintech narrow the gender wage gap? Evidence from China. China and World Economy , 29(4), 142–166. https://doi.org/10.1111/cwe.12382

27.

Hahm

, Subhanij

, & Almeida

(2021). Finteching remittances in paradise: A path to sustainable development. Asia and the Pacific Policy Studies . https://doi.org/10.1002/app5.341

28.

Hammerschlag

, Bick

, & Luiz

J. M.

(2020). The internationalization of African fintech firms: Marketing strategies for successful intra-Africa expansion. International Marketing Review , 37(2), 299–317. https://doi.org/10.1108/IMR-05-2019-0130

29.

Hasan

M. M.

, Yajuan

, & Khan

(2020). Promoting China’s inclusive finance through digital financial services. Global Business Review , (February 2020). https://doi.org/10.1177/0972150919895348

30.

Hasan

M. M.

, Yajuan

, & Mahmud

(2020). Regional development of China’s inclusive finance through financial technology. SAGE Open , 10(1). https://doi.org/10.1177/2158244019901252

31.

Hoffmann

C. H.

(2021). Blockchain use cases revisited: Micro-lending solutions for retail banking and financial inclusion. Journal of Systems Science and Information , 9(1), 1–15. https://doi.org/10.21078/JSSI-2021-001-15

32.

Hua

, & Huang

(2021). Understanding China’s fintech sector: Development, impacts and risks. European Journal of Finance , 27(4–5), 321–333. https://doi.org/10.1080/1351847X.2020.1811131

33.

Hyman

(2019). Fintech Driving Financial Inclusion: Recent developments - Alfonso Garcia Mora, Cambridge Centre for Alternative Finance. https://coilink.org/20.500.12592/7g02b6

34.

Iqbal

B. A.

, & Sami

(2017). Role of banks in financial inclusion in India. Contaduria y Administracion , 62(2), 644–656. https://doi.org/10.1016/j.cya.2017.01.007

35.

, Wang

, Xu

, & Li

(2021). Has digital financial inclusion narrowed the urban-rural income gap: The role of entrepreneurship in China. Sustainability (Switzerland) , 13(15), 1–18. https://doi.org/10.3390/su13158292

36.

Joia

L. A.

, & Cordeiro

J. P. V.

(2021). Unlocking the potential of fintechs for financial inclusion: A delphi-based approach. Sustainability (Switzerland) , 13(21). https://doi.org/10.3390/su132111675

37.

Kanga

, Oughton

, Harris

, & Murinde

(2021). The diffusion of fintech, financial inclusion and income per capita. European Journal of Finance . https://doi.org/10.1080/1351847X.2021.1945646

38.

Kim

(2022). Assessing the impact of mobile money on improving the financial inclusion of Nairobi women. Journal of Gender Studies , 31(3), 306–322. https://doi.org/10.1080/09589236.2021.1884536

39.

Kim

K. ha

. (2020). The role of mobile money in improving the financial inclusion of Nairobi’s urban poor. African Journal of Science, Technology, Innovation and Development , 12(7), 855–865. https://doi.org/10.1080/20421338.2020.1733281

40.

Kirana

M. Y.

, & Havidz

S. A. H.

(2020). Financial literacy and mobile payment usage as financial inclusion determinants. Proceedings of 2020 International Conference on Information Management and Technology, ICIMTech 2020 , (August), pp. 905–910. https://doi.org/10.1109/ICIMTech50083.2020.9211157

41.

Kong

S. T.

, & Loubere

(2021). Digitally down to the countryside: Fintech and rural development in China. Journal of Development Studies , 57(10), 1739–1754. https://doi.org/10.1080/00220388.2021.1919631

42.

Kumar

, Ghai

, Tyagi

, & Gupta

(2020). Leveraging technology for robust financial facilities: A comparative assessment of BRICS nations, in Proceedings of International Conference on Computation, Automation and Knowledge Management, ICCAKM 2020 , pp. 481–486. https://doi.org/10.1109/ICCAKM46823.2020.9051508

43.

Lagna

, & Ravishankar

M. N.

(2021). Making the world a better place with fintech research. Information Systems Journal , (February), pp. 1–42. https://doi.org/10.1111/isj.12333

44.

Larios-Hernández

G. J.

(2017). Blockchain entrepreneurship opportunity in the practices of the unbanked. Business Horizons , 60(6), 865–874. https://doi.org/10.1016/j.bushor.2017.07.012

45.

Łasak

(2022). The role of financial technology and entrepreneurial finance practices in funding small and medium-sized enterprises. Journal of Entrepreneurship, Management and Innovation , 18(1), 7–34. https://doi.org/10.7341/20221811

46.

Leong

, Tan

, Xiao

, Tan

F. T. C.

, & Sun

(2017). Nurturing a FinTech ecosystem: The case of a youth microloan startup in China. International Journal of Information Management , 37(2), 92–97. https://doi.org/10.1016/j.ijinfomgt.2016.11.006

47.

Liu

, Yao

, Latif

, Aslam

, & Iqbal

(2021). Impact of Green financing, FinTech, and financial inclusion on energy efficiency. Environmental Science and Pollution Research . https://doi.org/10.1007/s11356-021-16949-x

48.

Luo

, Luo

, & Lv

(2022). Can digital finance contribute to the promotion of financial sustainability? A financial efficiency perspective. Sustainability (Switzerland) , 14(7). https://doi.org/10.3390/su14073979

49.

Lyons

A. C.

, Kass-Hanna

, Liu

, Greenle

A. J.

, & Zeng

(2020). Building financial resilience through financial and digital literacy in South Asia and Sub-Saharan Africa [ADBI Working Papers].

50.

Lyons

, Kass-Hanna

, & Fava

A. P.

(2021). Fintech development and savings, borrowing and remittances: A comparative study of emerging economies. SSRN Electronic Journal . https://doi.org/10.2139/ssrn.3689142

51.

Mahalle

, Yong

, & Tao

(2021). Regulatory challenges and mitigation for account services offered by FinTech, in Proceedings of the 2021 IEEE 24th International Conference on Computer Supported Cooperative Work in Design, CSCWD 2021 , pp. 280–287. https://doi.org/10.1109/CSCWD49262.2021.9437631

52.

Maskara

P. K.

, Kuvvet

, & Chen

(2020). The role of P2P platforms in enhancing financial inclusion in US—An analysis of peer-to-peer lending across the rural-urban divide. 4(April), 1–55.

53.

Mehrotra

(2019). Financial inclusion through FinTech—A case of lost focus’, in 2019 International Conference on Automation, Computational and Technology Management, ICACTM 2019 , 103–107. https://doi.org/10.1109/ICACTM.2019.8776857

54.

Michael

, & Latkovska

(2021). The FinTech dividend: How much money is FinTech likely to mobilize for sustainable development? Global Policy , 12(5), 677–688. https://doi.org/10.1111/1758-5899.12994

55.

Moro-Visconti

, Rambaud

S. C.

, & Pascual

J. L.

(2020). Sustainability in FinTechs: An explanation through business model scalability and market valuation. Sustainability (Switzerland) , 12(24), 1–24. https://doi.org/10.3390/su122410316

56.

Museba

T. J.

, Ranganai

, & Gianfrate

(2021). Customer perception of adoption and use of digital financial services and mobile money services in Uganda. Journal of Enterprising Communities , 15(2), 177–203. https://doi.org/10.1108/JEC-07-2020-0127

57.

Natile

(2020). Digital finance inclusion and the mobile money “Social” Enterprise: A socio-legal critique of M-Pesa in Kenya. Historical Social Research-Historische Sozialforschung , 45(3), 74–94. https://doi.org/10.12759/hsr.45.2020.3.74-94

58.

Okello Candiya Bongomin

, & Ntayi

J. M.

(2020). Mobile money adoption and usage and financial inclusion: mediating effect of digital consumer protection. Digital Policy, Regulation and Governance , 22(3), 157–176. https://doi.org/10.1108/DPRG-01-2019-0005

59.

Okoli

T. T.

, & Tewari

D. D.

(2020). An empirical assessment of fintechs heterogeneous transmission channels to financial development among African economies. Cogent Economics and Finance , 8(1). https://doi.org/10.1080/23322039.2020.1829273

60.

Ozili

P. K.

(2018). Impact of digital finance on financial inclusion and stability. Borsa Istanbul Review , 18(4), 329–340. https://doi.org/10.1016/j.bir.2017.12.003

61.

Ozili

P. K.

(2021). Has financial inclusion made the financial sector riskier?. Journal of Financial Regulation and Compliance , 29(3), 237–255. https://doi.org/10.1108/JFRC-08-2020-0074

62.

Page

M. J.

, McKenzie

J. E.

, Bossuyt

P. M.

, Boutron

, Hoffmann

T. C.

, Mulrow

C. D.

, Shamseer

, Tetzlaff

J. M.

, Akl

E. A.

, Brennan

S. E.

, Chou

, Glanville

, Grimshaw

J. M.

, Hróbjartsson

, Lalu

M. M.

, Li

, Loder

E. W.

, Mayo-Wilson

, McDonald

, McGuinness

L. A.

, Stewart

L. A.

, Thomas

, Tricco

A. C.

, Welch

V. A.

, Whiting

, & Moher

(2021). The PRISMA 2020 statement: an updated guideline for reporting systematic reviews. Systematic Reviews , 10(1), 89.

63.

Parlour

C. A.

, Rajan

, & Zhu

(2020). When FinTech Competes for Payment Flows. SSRN Electronic Journal , 00, 1–40. https://doi.org/10.2139/ssrn.3544981

64.

, Teresiene

, Pieczulis

, Kong

, & Yue

X-G

(2021). The interaction between banking sector and financial technology companies: Qualitative assessment—A case of lithuania. Risks , 9(1), 1–22. https://doi.org/10.3390/risks9010021

65.

Rabbani

M. R.

(2022). Fintech innovations, scope, challenges, and implications in Islamic Finance: A systematic analysis. International Journal of Computing and Digital Systems , 11(1), 1–28.

66.

Saraswati

B. D.

, Maski

, Kaluge

, & Sakti

R. K.

(2020). The effect of financial inclusion and financial technology on effectiveness of the Indonesian monetary policy. Business: Theory and Practice , 21(1), 230–243. https://doi.org/10.3846/BTP.2020.10396

67.

Sarkar

, & Swami

(2019). Achieving the target of complete financial inclusion in India through financial technologies. Prajnān , 48(3), 2019–2039.

68.

Schinckus

(2020). The good, the bad and the ugly: An overview of the sustainability of blockchain technology. Energy Research and Social Science , 69(November 2019), 101614. https://doi.org/10.1016/j.erss.2020.101614

69.

Schueffel

(2017). Taming the beast: A scientific definition of Fintech. Journal of Innovation Management , 4(4), 32–54. https://doi.org/10.24840/2183-0606_004.004_0004

70.

Senyo

P. K.

, & Osabutey

E. L. C.

(2020). Unearthing antecedents to financial inclusion through FinTech innovations. Technovation , 98(June), 102155. https://doi.org/10.1016/j.technovation.2020.102155

71.

Šerėjienė

, Goranin

, & Tumasonienė

(2019). Analysis of mobile services in the financial sector. Mokslas – Lietuvos ateitis, 11 (2017), 1–5.

72.

Sharma

(2016). Nexus between financial inclusion and economic growth: Evidence from the emerging Indian economy. Journal of Financial Economic Policy , 8(1), 13–36. https://doi.org/10.1108/JFEP-01-2015-0004

73.

Shaikh

(2020). Using Fintech in scaling up Islamic microfinance. Journal of Islamic Accounting and Business Research. ahead-of-print . https://doi.org/10.1108/JIABR-10-2019-0198

74.

Siddiqui

T. A.

, & Siddiqui

K. I.

(2020). FinTech in India: An analysis on impact of telecommunication on financial inclusion. Strategic Change , 29(3), 321–330. https://doi.org/10.1002/jsc.2331

75.

Singh

, Gupta

, & Vatsa

(2021). A framework for enhancing cyber security in Fintech applications in India. Proceedings of International Conference on Technological Advancements and Innovations, ICTAI 2021 , 274–279. https://doi.org/10.1109/ICTAI53825.2021.9673277

76.

Suryono

R. R.

, Budi

, & Purwandari

(2020). Challenges and trends of financial technology (Fintech): A systematic literature review. Information (Switzerland) , 11(12), 1–20. https://doi.org/10.3390/info11120590

77.

Syed

A. A.

, Ahmed

, Kamal

M. A.

, & Segovia

J. E. T.

(2021). Assessing the role of digital finance on shadow economy and financial instability: An empirical analysis of selected South Asian countries. Mathematics , 9(23). https://doi.org/10.3390/math9233018

78.

United Nations. (2018). Igniting SDG Progress Through Digital Financial Inclusion. SDGs , 45. Available at: https://www.betterthancash.org/tools-research/reports/igniting-sdg-progress-through-digital-financial-inclusion

79.

Utami

A. F.

, & Ekaputra

I. A.

(2020). A paradigm shift in financial landscape: encouraging collaboration and innovation among Indonesian FinTech lending players. Journal of Science and Technology Policy Management , 12(2), 309–330. https://doi.org/10.1108/JSTPM-03-2020-0064

80.

Varga

(2018). Triple-bottom-line impact analysis. Vezetéstudomány / Budapest Management Review , 49, 24–35.

81.

Velazquez

P. V.

, Bobek

, Vide

R. K.

, & Horvat

(2022). Lessons from remarkable FinTech companies for the financial inclusion in Peru. Journal of Risk and Financial Management , 15(2), 62. https://doi.org/10.3390/jrfm15020062

82.

Wirani

, Randi

, Romadhon

M. S.

, & Suhendi

(2022). The influence of familiarity and personal innovativeness on the acceptance of fintech lending services: A perspective from Indonesian borrowers. Register: Jurnal Ilmiah Teknologi Sistem Informasi , 8(1), 81–93. https://doi.org/10.26594/register.v8i1.2327

83.

Yue

, Korkmaz

A. G.

, Yin

, & Zhou

(2022). The rise of digital finance: Financial inclusion or debt trap? Finance Research Letters , 47(April 2020), 102604. https://doi.org/10.1016/j.frl.2021.102604

84.

Yuneline

M. H.

(2022). Implications of Shariah Financial Technology in increasing financial inclusion to micro, small, and medium enterprises. Implikasi Fintech Syariah dalam Peningkatan Inklusi Keuangan pada Usaha Mikro, Kecil, dan Menengah , 44(1), 89–99. Available at: http://10.0.68.168/islamiyyat-2022-4401-8%0Ahttps://search.ebscohost.com/login.aspx?direct=true&db=asn&AN=158048213&site=ehost-live

85.

Zhang

, Zhang

, Wan

, & Luo

(2020). Fintech, growth and inequality: Evidence from China’s household survey data. Singapore Economic Review , 65(supp01), 75–93. https://doi.org/10.1142/S0217590819440028

Changing Landscape of Financial Inclusion Through FinTech: A Systematic Literature Review

Abstract

Keywords

Get full access to this article

References