The Impact of Digital Inclusive Finance on Multidimensional Poverty in Rural Areas: A Dual Perspective of Innovation and Green Credit

As the inclusive finance paradigm expands, there has been a marked increase in financial penetration within China. However, certain remote and impoverished rural areas continue to grapple with significant financial exclusion. Digital inclusive finance serves as a beneficial augmentation to traditional inclusive finance, leveraging technological innovation to extend the reach of financial services. This expansion holds substantial practical significance for reducing the wealth disparity between urban and rural areas in China and for mitigating the multifaceted issues of relative poverty.

This study, after systematically reviewing the theories and literature on the relationship between digital inclusive finance and multidimensional relative poverty in rural settings, clarifies the connotations and interplay between these two domains. Utilizing panel data from the China Family Panel Studies (CFPS) spanning the years 2010 to 2020, the study constructs relevant models and employs methods such as the two-way fixed effects model to empirically test the role of digital inclusive finance in alleviating multidimensional relative poverty in rural areas. The findings reveal that, in general, digital inclusive finance plays a positive role in mitigating this form of poverty, yet there are notable heterogeneities in digital technology proficiency and regional disparities.

Analyzing from various dimensions, the poverty reduction contribution rates of digital inclusive finance are sequentially the depth of usage, the breadth of coverage, and the degree of digitalization. Regarding the transmission channels, the study discovers that digital inclusive finance primarily alleviates multidimensional relative poverty in rural areas by enhancing the stock of human capital. Furthermore, the research also uncovers that policy synergy plays a significant positive role in alleviating rural multidimensional relative poverty, which holds important implications for future policy formulation and implementation.