IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v13y2021i21p11675-d662217.html
   My bibliography  Save this article

Unlocking the Potential of Fintechs for Financial Inclusion: A Delphi-Based Approach

Author

Listed:
  • Luiz Antonio Joia

    (Brazilian School of Public and Business Administration, Getulio Vargas Foundation, Rio de Janeiro 22231-010, Brazil)

  • Joaquim Pedro Vasconcelos Cordeiro

    (Brazilian Economic and Social Development Bank (BNDES), Rio de Janeiro 20031-917, Brazil)

Abstract

The financial sector is experiencing an accelerated process of transformation shaped by fintechs, which opens an important window of opportunity to increase financial inclusion in emerging markets, such as Brazil, with high financial exclusion. Thus, this article investigates, through a Delphi approach involving fintech professionals, the potential of fintechs to enable financial inclusion in emerging markets, using Brazil as a proxy. The analysis carried out identified three domains related to fintechs that have the potential to impact financial inclusion: (i) fintechs can serve niches of people without a bank account in the traditional financial market, (ii) fintechs can reduce costs for clients through increased competition, and (iii) fintechs can offer financial services in remote locations, far from traditional financial institutions. Thus, with the objective of developing a public agenda of financial inclusion through fintechs, the article proposes four lines of public policies: (i) expansion and modernization of mobile and internet infrastructure, (ii) improvement of the population’s financial and digital education, (iii) implementation of a trustworthy environment for the fintech clients, and (iv) development and enforcement of an effective legal and regulatory framework for fintechs. These policies, if implemented, can benefit people excluded from the financial system around the world.

Suggested Citation

  • Luiz Antonio Joia & Joaquim Pedro Vasconcelos Cordeiro, 2021. "Unlocking the Potential of Fintechs for Financial Inclusion: A Delphi-Based Approach," Sustainability, MDPI, vol. 13(21), pages 1-19, October.
    • Handle: RePEc:gam:jsusta:v:13:y:2021:i:21:p:11675-:d:662217
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/13/21/11675/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/13/21/11675/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Asli Demirgüç-Kunt & Leora Klapper & Dorothe Singer & Saniya Ansar & Jake Hess, 2020. "The Global Findex Database 2017: Measuring Financial Inclusion and Opportunities to Expand Access to and Use of Financial Services," The World Bank Economic Review, World Bank, vol. 34(Supplemen), pages 2-8.
    2. Allen, Franklin & Demirguc-Kunt, Asli & Klapper, Leora & Martinez Peria, Maria Soledad, 2016. "The foundations of financial inclusion: Understanding ownership and use of formal accounts," Journal of Financial Intermediation, Elsevier, vol. 27(C), pages 1-30.
    3. Ozili, Peterson K, 2020. "Social inclusion and financial inclusion: international evidence," MPRA Paper 101811, University Library of Munich, Germany.
    4. Santiago Carbo & Edward P. M. Gardener & Philip Molyneux, 2007. "Financial Exclusion in Europe," Public Money & Management, Taylor & Francis Journals, vol. 27(1), pages 21-27, February.
    5. Pavol Durana & Lucia Michalkova & Andrej Privara & Josef Marousek & Milos Tumpach, 2021. "Does the life cycle affect earnings management and bankruptcy?," Oeconomia Copernicana, Institute of Economic Research, vol. 12(2), pages 425-461, June.
    6. Hyun-Sun Ryu & Kwang Sun Ko, 2020. "Sustainable Development of Fintech: Focused on Uncertainty and Perceived Quality Issues," Sustainability, MDPI, vol. 12(18), pages 1-18, September.
    7. Annamaria Lusardi & Olivia S. Mitchell, 2014. "The Economic Importance of Financial Literacy: Theory and Evidence," Journal of Economic Literature, American Economic Association, vol. 52(1), pages 5-44, March.
    8. Asli Demirguc-Kunt & Leora Klapper, 2013. "Measuring Financial Inclusion: Explaining Variation in Use of Financial Services across and within Countries," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 46(1 (Spring), pages 279-340.
    9. Asli Demirguc-Kunt & Leora Klapper & Dorothe Singer & Saniya Ansar & Jake Hess, 2018. "Global Findex Database 2017 [La base de datos Global Findex 2017]," World Bank Publications - Books, The World Bank Group, number 29510, December.
    10. Berger, Allen N. & Black, Lamont K., 2011. "Bank size, lending technologies, and small business finance," Journal of Banking & Finance, Elsevier, vol. 35(3), pages 724-735, March.
    11. Chauvet, Lisa & Jacolin, Luc, 2017. "Financial Inclusion, Bank Concentration, and Firm Performance," World Development, Elsevier, vol. 97(C), pages 1-13.
    12. Xu, Lisa & Zia, Bilal, 2012. "Financial literacy around the world : an overview of the evidence with practical suggestions for the way forward," Policy Research Working Paper Series 6107, The World Bank.
    13. Ann L. Owen & Javier M. Pereira, 2018. "Bank concentration, competition, and financial inclusion," Review of Development Finance Journal, Chartered Institute of Development Finance, vol. 8(1), pages 1-17.
    14. Demirguc-Kunt,Asli & Klapper,Leora & Singer,Dorothe & Van Oudheusden,Peter, 2015. "The Global Findex Database 2014 : measuring financial inclusion around the world," Policy Research Working Paper Series 7255, The World Bank.
    15. André Mialou & Goran Amidzic & Alexander Massara, 2017. "Assessing Countries’ Financial Inclusion Standing– A New Composite Index," Journal of Banking and Financial Economics, University of Warsaw, Faculty of Management, vol. 2(8), pages 105-126, October.
    16. Peterson K. Ozili, 2020. "Social inclusion and financial inclusion: international evidence," International Journal of Development Issues, Emerald Group Publishing Limited, vol. 19(2), pages 169-186, April.
    17. Yong Jae Shin & Yongrok Choi, 2019. "Feasibility of the Fintech Industry as an Innovation Platform for Sustainable Economic Growth in Korea," Sustainability, MDPI, vol. 11(19), pages 1-21, September.
    18. World Bank, 2020. "World Development Report 2020," World Bank Publications - Books, The World Bank Group, number 32437, December.
    19. Therese Wilson, 2012. "Supporting Social Enterprises to Support Vulnerable Consumers: The Example of Community Development Finance Institutions and Financial Exclusion," Journal of Consumer Policy, Springer, vol. 35(2), pages 197-213, June.
    20. Pierre-Laurent Chatain & Andrew Zerzan & Wameek Noor & Najah Dannaoui & Louis de Koker, 2011. "Protecting Mobile Money against Financial Crimes : Global Policy Challenges and Solutions," World Bank Publications - Books, The World Bank Group, number 2269, December.
    21. World Bank, 2014. "Global Financial Development Report 2014 : Financial Inclusion," World Bank Publications - Books, The World Bank Group, number 16238, December.
    22. Eduardo Henrique Diniz & Marlei Pozzebon & Martin Jayo, 2009. "The Role of ICT in Helping Parallel Paths Converge: Microcredit and Correspondent Banking in Brazil," Journal of Global Information Technology Management, Taylor & Francis Journals, vol. 12(2), pages 80-103, April.
    23. Xiang Deng & Zhi Huang & Xiang Cheng, 2019. "FinTech and Sustainable Development: Evidence from China Based on P2P Data," Sustainability, MDPI, vol. 11(22), pages 1-19, November.
    24. Marco Crocco & Fabiana Santos & Ana Tereza Lanna Figueiredo, 2011. "Exclusão financeira no Brasil: uma análise regional exploratória," Textos para Discussão Cedeplar-UFMG td450, Cedeplar, Universidade Federal de Minas Gerais.
    25. Lusardi, Annamaria & Mitchell, Olivia S., 2011. "Financial literacy around the world: an overview," Journal of Pension Economics and Finance, Cambridge University Press, vol. 10(4), pages 497-508, October.
    26. Jentzsch, Nicola, 2012. "Implications of mandatory registration of mobile phone users in Africa," Telecommunications Policy, Elsevier, vol. 36(8), pages 608-620.
    27. Cristina Chueca Vergara & Luis Ferruz Agudo, 2021. "Fintech and Sustainability: Do They Affect Each Other?," Sustainability, MDPI, vol. 13(13), pages 1-19, June.
    28. Jon Frost, 2020. "The economic forces driving FinTech adoption across countries," Working Papers 663, DNB.
    29. World Bank, 2018. "World Development Report 2018 [Rapport sur le développement dans le monde 2018]," World Bank Publications - Books, The World Bank Group, number 28340, December.
    30. Frame, W Scott & Srinivasan, Aruna & Woosley, Lynn, 2001. "The Effect of Credit Scoring on Small-Business Lending," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 33(3), pages 813-825, August.
    31. Stiglitz, Joseph E & Weiss, Andrew, 1981. "Credit Rationing in Markets with Imperfect Information," American Economic Review, American Economic Association, vol. 71(3), pages 393-410, June.
    32. Isaac Appiah-Otoo & Na Song, 2021. "The Impact of Fintech on Poverty Reduction: Evidence from China," Sustainability, MDPI, vol. 13(9), pages 1-13, May.
    33. Tatiana Zalan & Elissar Toufaily, 2017. "The Promise of Fintech in Emerging Markets: Not as Disruptive," Contemporary Economics, University of Economics and Human Sciences in Warsaw., vol. 11(4), December.
    34. Rossella Locatelli & Alessandra Tanda, 2021. "Financial education in times of digitalization and FinTech (r)evolution," Chapters, in: Riccardo Viale & Umberto Filotto & Barbara Alemanni & Shabnam Mousavi (ed.), Financial Education and Risk Literacy, chapter 4, pages 60-74, Edward Elgar Publishing.
    35. Morgan, Peter J. & Long, Trinh Quang, 2020. "Financial literacy, financial inclusion, and savings behavior in Laos," Journal of Asian Economics, Elsevier, vol. 68(C).
    36. Daniela Gabor & Sally Brooks, 2017. "The digital revolution in financial inclusion: international development in the fintech era," New Political Economy, Taylor & Francis Journals, vol. 22(4), pages 423-436, July.
    37. World Bank, 2018. "Global Financial Development Report 2017/2018," World Bank Publications - Books, The World Bank Group, number 28482, December.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Sagir Danladi & M. S. V. Prasad & Umar Muhammad Modibbo & Seyedeh Asra Ahmadi & Peiman Ghasemi, 2023. "Attaining Sustainable Development Goals through Financial Inclusion: Exploring Collaborative Approaches to Fintech Adoption in Developing Economies," Sustainability, MDPI, vol. 15(17), pages 1-14, August.
    2. Murshed, Muntasir & Ahmed, Rizwan & Al-Tal, Raad Mahmoud & Kumpamool, Chamaiporn & Vetchagool, Witchulada & Avarado, Rafael, 2023. "Determinants of financial inclusion in South Asia: The moderating and mediating roles of internal conflict settlement," Research in International Business and Finance, Elsevier, vol. 64(C).
    3. Tan, Qingmei & Yasmeen, Humaira & Ali, Sharafat & Ismail, Hina & Zameer, Hashim, 2023. "Fintech development, renewable energy consumption, government effectiveness and management of natural resources along the belt and road countries," Resources Policy, Elsevier, vol. 80(C).
    4. Ying Chu & Shujun Ye & Hongchang Li & Jack Strauss & Chen Zhao, 2023. "Can Digitalization Foster Sustainable Financial Inclusion? Opportunities for Both Banks and Vulnerable Groups," Sustainability, MDPI, vol. 15(8), pages 1-21, April.
    5. Minghua Chen & Qinru Chu & Tengwen Zhang & Qian Li & Jianxu Liu & Woraphon Yamaka, 2023. "The Structural Causes and Trend Evolution of Imbalance and Insufficiency of Development of Digital Inclusive Finance in China," Sustainability, MDPI, vol. 15(13), pages 1-22, June.
    6. Kangyu Ren & Yuan Wang & Lulu Liu, 2023. "Impact of Traditional and Digital Financial Inclusion on Enterprise Innovation: Evidence from China," SAGE Open, , vol. 13(1), pages 21582440221, January.
    7. Emerson Wagner Mainardes & Priscilla Maria Ferreira Costa & Silvania Neris Nossa, 2023. "Customers’ satisfaction with fintech services: evidence from Brazil," Journal of Financial Services Marketing, Palgrave Macmillan, vol. 28(2), pages 378-395, June.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Sholevar, Maryam & Harris, Laurence, 2019. "Mind the gap: A discussion paper on Financial Literacy, Financial behaviour and Financial Education : Is there any Gender Gap?," OSF Preprints b7zd6, Center for Open Science.
    2. Wang, Rui & Luo, Hang (Robin), 2022. "How does financial inclusion affect bank stability in emerging economies?," Emerging Markets Review, Elsevier, vol. 51(PA).
    3. Helena Susana Amaral Geraldes & Ana Paula Matias Gama & Mário Augusto, 2022. "Reaching Financial Inclusion: Necessary and Sufficient Conditions," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 162(2), pages 599-617, July.
    4. Amit Pandey & Ravi Kiran & Rakesh Kumar Sharma, 2022. "Investigating the Impact of Financial Inclusion Drivers, Financial Literacy and Financial Initiatives in Fostering Sustainable Growth in North India," Sustainability, MDPI, vol. 14(17), pages 1-21, September.
    5. Juan Carlos Urueña-Mejía & Luis H. Gutierrez & Paul Rodríguez-Lesmes, 2023. "Financial inclusion and business practices of microbusiness in Colombia," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 13(2), pages 465-494, June.
    6. David Damiyano & Stephen Mago, 2023. "An Analysis of the Impact of Financial Inclusion on Poverty and Development: Case of SACU Countries," International Journal of Economics and Financial Issues, Econjournals, vol. 13(6), pages 141-147, November.
    7. Gallego-Losada, María-Jesús & Montero-Navarro, Antonio & García-Abajo, Elisa & Gallego-Losada, Rocío, 2023. "Digital financial inclusion. Visualizing the academic literature," Research in International Business and Finance, Elsevier, vol. 64(C).
    8. Grohmann, Antonia & Klühs, Theres & Menkhoff, Lukas, 2018. "Does financial literacy improve financial inclusion? Cross country evidence," World Development, Elsevier, vol. 111(C), pages 84-96.
    9. Dan Ma & Wenchun Wang, 2023. "Mandatory inclusive finance policy and small banks' operating performance: Evidence from China," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 63(4), pages 4761-4777, December.
    10. Agyekum, Francis K. & Reddy, Krishna & Wallace, Damien & Wellalage, Nirosha H., 2022. "Does technological inclusion promote financial inclusion among SMEs? Evidence from South-East Asian (SEA) countries," Global Finance Journal, Elsevier, vol. 53(C).
    11. Thereza Balliester Reis, 2022. "Socio‐economic determinants of financial inclusion: An evaluation with a microdata multidimensional index," Journal of International Development, John Wiley & Sons, Ltd., vol. 34(3), pages 587-611, April.
    12. Guillermo Boitano & Deybi Franco Abanto, 2020. "Challenges of financial inclusion policies in Peru," Revista Finanzas y Politica Economica, Universidad Católica de Colombia, vol. 12(1), pages 89-117, June.
    13. Feghali, Khalil & Mora, Nada & Nassif, Pamela, 2021. "Financial inclusion, bank market structure, and financial stability: International evidence," The Quarterly Review of Economics and Finance, Elsevier, vol. 80(C), pages 236-257.
    14. Tram, Thi Xuan Huong & Lai, Tien Dinh & Nguyen, Thi Truc Huong, 2023. "Constructing a composite financial inclusion index for developing economies," The Quarterly Review of Economics and Finance, Elsevier, vol. 87(C), pages 257-265.
    15. Saibal Ghosh, 2020. "Access to and use of finance in India: does religion matter?," Indian Economic Review, Springer, vol. 55(1), pages 67-92, June.
    16. Manuel Salas‐Velasco & Dolores Moreno‐Herrero & José Sánchez‐Campillo, 2021. "Teaching financial education in schools and students' financial literacy: A cross‐country analysis with PISA data," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 26(3), pages 4077-4103, July.
    17. Marcelin, Isaac & Egbendewe, Aklesso Y.G. & Oloufade, Djoulassi K. & Sun, Wei, 2022. "Financial inclusion, bank ownership, and economy performance: Evidence from developing countries," Finance Research Letters, Elsevier, vol. 46(PA).
    18. Calderone, Margherita & Fiala, Nathan & Mulaj, Florentina & Sadhu, Santadarshan & Sarr, Leopold, 2014. "When Can Financial Education Affect Savings Behavior? Evidence From A Randomized Experiment Among Low Income Clients of Branchless Banking in India," Working Papers 32, University of Connecticut, Department of Agricultural and Resource Economics, Charles J. Zwick Center for Food and Resource Policy.
    19. Ndlovu, Godfrey & Toerien, Francois, 2020. "The distributional impact of access to finance on poverty: evidence from selected countries in Sub-Saharan Africa," Research in International Business and Finance, Elsevier, vol. 52(C).
    20. Yue, Pengpeng & Korkmaz, Aslihan Gizem & Yin, Zhichao & Zhou, Haigang, 2022. "The rise of digital finance: Financial inclusion or debt trap?," Finance Research Letters, Elsevier, vol. 47(PA).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jsusta:v:13:y:2021:i:21:p:11675-:d:662217. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.