Digital Financial Inclusion Through Mobile Finance Innovation in Rural China: Cases from a Multi-level Study at the Base of the Pyramid

Mobile finance innovation (MFI), such as mobile payment and mobile banking diffusion, has been viewed as a key innovation for financial inclusion in the "Base of Pyramid" (BOP), particularly digital financial inclusion (DFI). How can the diffusion of MFI be understood and accelerated to advance DFI for the BOP? Building on a multi-level research design, we explore factors influencing MFI diffusion to advance DFI through six comparative cases in rural China. Based on an enhanced individual, technological, organizational, and environmental (I-TOE) framework of MFI diffusion, findings of 67 semi-structured in-depth interviews are discussed and triangulated with survey results from 395 survey questionnaires. Our findings confirm the relationship between DFI and MFI in the BOP market. Key factors of the proposed I-TOE framework have considerable effects on MFI diffusion at the innovation ecosystem level. Cultural-specific factors, such as the "Hukou" rural status, family-based social network, hometown-based communication pattern, and personality-trust orientation, contribute to the process. Finally, rural financial education, acting as a catalyst, has accelerated the evolution process of the MFI ecosystem. Our study extends a holistic perspective of innovation ecosystem management to embrace financial inclusion literature.