Inclusive Finance and Poverty Reduction in China

Abstract

The development of Internet and information technologies are raising new forms of financial services, especially to benefit small businesses and individuals based on the convenience and low costs of the new forms of financial services based on the Internet. The dissertation is about how Internet finance is useful in dealing with poverty, with referring to China. For the many ways to alleviate poverty, providing financial services to the poor is the important practices. The aim is to study how Internet finance is useful in dealing with poverty. The paper refers to the step-wise regression analysis to raise results of finance inclusion in China and the various potential relevant factors: coverage breadth, the depth of use, payment, insurance, and credit loan. Overall, we find that improvements in coverage breadth, depth of use, payment index and credit loan index all have a positive effect on the improvement of financial inclusion, while the insurance index is not statistically significant. In the robustness check, I use the financial inclusion index instead of the disposable income to test whether the results are consistent with the regression analysis results inside Table 3. We compared the findings in the literature review section and the empirical results for each relationship identified from analysis, an in-depth understanding of digital currencies and online payments, and the role of new payment methods in improving financial inclusion. The significance of this dissertation is to find how Internet finance can be achieved and be helpful in dealing with poverty in China.