The Rural Poverty Reduction Effect of Digital Inclusive Finance in China: Mechanism and Promotion Path

Abstract

In recent years, the Chinese government has introduced a series of policies and measures to encourage financial institutions to leverage new-generation information technology to create financial products and services that benefit farmers and the public, thereby enhancing the level of digital inclusive finance in rural areas. Leveraging its low cost, wide coverage, and convenience, digital inclusive finance has opened up a new path for addressing long-standing poverty issues. Taking China as an example, digital inclusive finance exerts significant rural poverty reduction effects through mechanisms such as supporting rural industrial development, enhancing the accessibility of financial services, and strengthening farmers’ risk management capabilities. However, issues like insufficient promotion, weak financial literacy among farmers, inadequate assessment systems of financial institutions, and mismatched service products persist in rural areas. Addressing these issues, this paper proposes promotion paths for digital inclusive finance from both the demand and supply sides, aiming to further unleash its rural poverty reduction potential.