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Can Fintech development improve the financial inclusion of village and township banks? Evidence from China

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  • Chen, Xiaojie
  • He, Guangwen
  • Li, Qian

Abstract

Enhancing the financial inclusion of financial institutions enables more vulnerable groups to obtain opportunities to access loans—an essential prerequisite for achieving the United Nations' Sustainable Development Goals. The main purpose of this study is to explore whether the development of Fintech impacts the financial inclusion of village and township banks (VTBs). Using the micro survey data of 900 VTBs, this paper empirically analyzes the impact of financial technology on the financial inclusion of VTBs and explores the mediating role of mobile banking adoption. The results demonstrate that the development of Fintech can improve the financial inclusion of VTBs through the application of mobile banking. Notably, VTBs can significantly contribute to financial inclusion by adopting an online and offline service model, though mobile banking is substituting physical branches with the rapid development of financial technology. Further analysis finds that the development of Fintech has prompted VTBs to increase the inclusiveness of loans to rural households, loans to poor households, and loans to small and micro enterprises. Furthermore, rural credit institutions and city commercial banks as the main shareholders are conducive to strengthening the role of Fintech in promoting the financial inclusion of VTBs. Finally, the development of Fintech has a stronger competitive incentive for VTBs located in the eastern regions.

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  • Chen, Xiaojie & He, Guangwen & Li, Qian, 2024. "Can Fintech development improve the financial inclusion of village and township banks? Evidence from China," Pacific-Basin Finance Journal, Elsevier, vol. 85(C).
    • Handle: RePEc:eee:pacfin:v:85:y:2024:i:c:s0927538x24000751
    DOI: 10.1016/j.pacfin.2024.102324
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    Cited by:

    1. Liu, Ziqiang & Feng, Qiushuo & Li, Hongyi, 2024. "Digital finance, bank competition shocks and operational efficiency of local commercial banks in Western China," Pacific-Basin Finance Journal, Elsevier, vol. 85(C).
    2. Qian, Shuitu & Yang, Zhenyu & Fang, Xia, 2025. "Bank fintech and corporate green transformation quality improvement: based on greenwashing governance perspective," Economic Analysis and Policy, Elsevier, vol. 87(C), pages 401-423.
    3. Ren, Jingjing & Wu, Bo, 2025. "Digital village, inclusive finance, and consumption upgrading in rural areas," Finance Research Letters, Elsevier, vol. 85(PD).
    4. Shahriar, Abu Zafar M. & Alam, Quamrul, 2024. "Violence against women, innate preferences and financial inclusion," Pacific-Basin Finance Journal, Elsevier, vol. 87(C).
    5. Ali, Hassnian & Aysan, Ahmet Faruk, 2025. "Macroeconomic asymmetries and their influence on fintech ecosystem growth: A global and regional perspective," The Journal of Economic Asymmetries, Elsevier, vol. 31(C).
    6. Li, Rongda & He, Jing, 2024. "FinTech development and household resilience to negative income shocks: The role of informal risk sharing," International Review of Economics & Finance, Elsevier, vol. 94(C).
    7. Tang, Mengxuan & Hu, Yang & Hou, Yang (Greg) & Oxley, Les & Goodell, John W., 2025. "Fintech development and corporate financial policy: Evidence from corporate financing and investment," Journal of International Money and Finance, Elsevier, vol. 157(C).

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    JEL classification:

    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • Q14 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Finance
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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