Driving financial inclusion: the social and economic impact of FinTech on developing economies

Abstract

Global inequality in opportunities to participate in the financial system, i.e. lack of financial inclusion is a significant issue that leaves the unbanked population outside of the global economy. The unbanked population engages in economic activities using cash and lack easy access to savings and credit opportunities with reasonable prices. The increase in financial inclusion through FinTech can create a level playing field and yield significant welfare benefits, such as better risk management and increase in gender equality. This literature review provides a discussion on issues regarding financial inclusion and the solution that FinTech has to offer. The research objective is to first, discuss the impact that FinTech has had on increasing financial inclusion and second, to examine the impacts that this FinTech-led increase in financial inclusion has had on households in developing economies. This will be done by critically reviewing recent academic literature and available empirical evidence on the topic.