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Financial inclusion through digitalisation: Economic viability for the bottom of the pyramid (BOP) segment

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  • Gupta, Suraksha
  • Kanungo, Rama Prasad

Abstract

The bottom of the pyramid (BOP) in every developing and frontier economy represents a largely untapped segment of the market that is excluded from formal financial markets because it cannot be served using the traditional financial market channels. We use a mixed-method approach to examine the challenges and intricacies of financial inclusion for the BOP segment in developing and frontier economies. To build a foundation for this debate, we conduct a review of the financial services and intermediaries serving the BOP, using case studies, experts’ insights, and quantitative analysis. Perspectives drawn from case studies of microfinancing firms and experts’ insights are used to explain the collaborations between businesses and formal institutions that can create a viable economic channel useful for serving the BOP segment. Further quantitative analysis demonstrates that a higher degree of financial inclusion for the BOP segment is likely to be achieved through the digitalisation of formal financial intermediaries, like banks.

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  • Gupta, Suraksha & Kanungo, Rama Prasad, 2022. "Financial inclusion through digitalisation: Economic viability for the bottom of the pyramid (BOP) segment," Journal of Business Research, Elsevier, vol. 148(C), pages 262-276.
    • Handle: RePEc:eee:jbrese:v:148:y:2022:i:c:p:262-276
    DOI: 10.1016/j.jbusres.2022.04.070
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    1. Ozili, Peterson K, 2023. "Impact of monetary policy on financial inclusion in emerging markets," MPRA Paper 117804, University Library of Munich, Germany.
    2. Peterson K. Ozili & David Mhlanga, 2024. "Why is financial inclusion so popular? An analysis of development buzzwords," Journal of International Development, John Wiley & Sons, Ltd., vol. 36(1), pages 231-253, January.
    3. Hao, Yunping & Zhang, Bing, 2024. "The impact of digital financial usage on resident’s income inequality in China: An empirical analysis based on CHFS data," Journal of Asian Economics, Elsevier, vol. 91(C).
    4. Papadopoulos, Nicolas & Cleveland, Mark, 2023. "An international and cross-cultural perspective on ‘the wired consumer’: The digital divide and device difference dilemmas," Journal of Business Research, Elsevier, vol. 156(C).
    5. Sinha, Neena & Paul, Justin & Singh, Nidhi, 2024. "Mobile payments for bottom of the pyramid: Towards a positive social change," Technological Forecasting and Social Change, Elsevier, vol. 202(C).

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