Study on the Influence of Digital Inclusive Finance on the Credit Risk of Commercial Banks in China

Digital Inclusive Finance (DIF) has improved the convenience and efficiency of financial services, reduced banks’ operating costs, and promoted the stability of commercial banks. This study aims to explore the impact of DIF on credit risk in Chinese commercial banks. An empirical analysis is conducted using a fixed effects model. The relationship between the development of DIF and commercial bank credit risk presents an inverted U shape. Initially, the expansion of Internet finance and financial technology companies led to customer loss for commercial banks, reducing traditional business profits and prompting banks to lower loan approval standards to expand their business scale, thereby increasing credit risk. As digital inclusive finance matures and regulatory mechanisms improve, commercial banks collaborate with financial technology companies to form cooperative models that jointly reduce credit risk. Furthermore, the impact of DIF is not significant for nationwide banks and rural commercial banks but has a significant influence on state-owned large banks and urban commercial banks. This study provides valuable references for Chinese commercial banks in promoting DIF, emphasizing the importance of maintaining robust risk management while innovating, and offering theoretical support for financial policymakers.