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Digital Financial Inclusion and Rural Household Debt Risks

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  • Yunhui Wang
  • Yihua Chen

Abstract

Technology is a double‐edged sword. Departing from extant literature that centres on urban households, this study is the first to document the long‐run dynamic effects of digital inclusive finance on rural household debt risk in China. Using four waves (2016–2020) of the China Family Panel Studies (CFPS), we identify both the impact and underlying mechanisms. Results indicate that digital inclusive finance (DFI) significantly raises rural households' leverage by fueling material aspirations and reducing income uncertainty. The effect is most pronounced in the central and western regions, among purely agricultural households, and among those owning two dwellings. This study contributes new empirical evidence on the relationship between DFI and debt risks among rural households, thus offering valuable insights for policymakers in developing countries striving to foster the development of DFI in rural areas.

Suggested Citation

  • Yunhui Wang & Yihua Chen, 2026. "Digital Financial Inclusion and Rural Household Debt Risks," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 31(2), pages 2012-2026, April.
    • Handle: RePEc:wly:ijfiec:v:31:y:2026:i:2:p:2012-2026
    DOI: 10.1002/ijfe.70028
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