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Does digital finance improve household financial health? Evidence from China

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  • Zhu, Minghao
  • Shi, Haimeng
  • Kong, Rong
  • Khalid, Zarqa
  • Hassan, Maaz
  • Chen, Zhe

Abstract

Improving household financial health has become a central goal of inclusive finance initiatives as digital finance continues to reshape financial access globally. This study investigates how digital finance influences household financial health in China and whether its benefits extend to families facing different types of risk. Using nationally representative household panel survey data from three survey waves for the period of 2015 to 2019, we empirically identify both the direct effects of digital finance and the mechanisms through which these effects operate. The results show that the greater use of digital finance is associate with improvements in household financial health. Further analysis demonstrates that these gains are driven by expanding access to financial information, diversifying financial products, and strengthening social interaction. Moreover, the presence of robust digital infrastructure amplifies these positive effects. Importantly, digital finance helps households maintain stronger financial health when confronted with health, unemployment, and income risks. Overall, the findings highlight digital finance as an effective pathway to financial resilience and provide practical insights for policymakers seeking strengthen digital financial inclusion in developing economies.

Suggested Citation

  • Zhu, Minghao & Shi, Haimeng & Kong, Rong & Khalid, Zarqa & Hassan, Maaz & Chen, Zhe, 2026. "Does digital finance improve household financial health? Evidence from China," Pacific-Basin Finance Journal, Elsevier, vol. 96(C).
    • Handle: RePEc:eee:pacfin:v:96:y:2026:i:c:s0927538x25003531
    DOI: 10.1016/j.pacfin.2025.103016
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    JEL classification:

    • C58 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Financial Econometrics
    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • G51 - Financial Economics - - Household Finance - - - Household Savings, Borrowing, Debt, and Wealth

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