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Contesting digital finance for the poor

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  • Ozili, Peterson K

Abstract

This article critically examines digital finance as a pro-poor private sector intervention for international development. It examines the turn from ‘microfinance for the poor’ to ‘digital finance for the poor’. It then considers three key issues, and contest the argument that digital finance is pro-poor. Notably, proponents argue that digital finance can improve development outcomes, but this is based on weak economic logic; secondly, proponents argue that digital finance for the poor is good business - this claim is very weak because evidence suggest that digital finance is good business only with government support. The article further argues that digital finance for the poor will expose the poorest to multiple risks in the financial sector. Therefore, digital finance for the poor should be a contested enterprise.

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  • Ozili, Peterson K, 2020. "Contesting digital finance for the poor," MPRA Paper 101812, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:101812
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    Cited by:

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    2. Peterson K. Ozili & David Mhlanga & Rym Ammar & Marwa Fersi, 2024. "Information Effect of Fintech and Digital Finance on Financial Inclusion during the COVID-19 Pandemic: Global Evidence," FinTech, MDPI, vol. 3(1), pages 1-17, January.
    3. Jamil, Abd Rahim Md. & Law, Siong Hook & Mohamad Khair-Afham, M.S. & Trinugroho, Irwan, 2023. "Financial inclusion and economic uncertainty in developing countries: The role of digitalisation," Economic Analysis and Policy, Elsevier, vol. 79(C), pages 786-806.
    4. Liu, Aiping & Urquía-Grande, Elena & López-Sánchez, Pilar & Rodríguez-López, Ángel, 2023. "Research into microfinance and ICTs: A bibliometric analysis," Evaluation and Program Planning, Elsevier, vol. 97(C).
    5. Yang, Ping & Lv, Yanqin & Chen, Xiaodan & Lv, Juan, 2024. "Digital finance, natural resource constraints and firms' low-carbon behavior: Evidence from listed companies," Resources Policy, Elsevier, vol. 89(C).
    6. Suhrab, Muhammad & Chen, Pinglu & Ullah, Atta, 2024. "Digital financial inclusion and income inequality nexus: Can technology innovation and infrastructure development help in achieving sustainable development goals?," Technology in Society, Elsevier, vol. 76(C).
    7. Qian Wang & Jinbao Yang & Yung‐ho Chiu & Tai‐Yu Lin, 2023. "Cross‐regional comparative study on digital finance and finance efficiency in China: The eastern and non‐eastern areas," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 44(1), pages 68-83, January.
    8. Franklin Noll, 2024. "Cash Bill Pay Services and Payment Inclusion in the United States," Payments System Research Briefing, Federal Reserve Bank of Kansas City, pages 1-6, October.
    9. Ozili, Peterson K, 2020. "Comparing digital finance in the UK, US, India and Nigeria," MPRA Paper 104498, University Library of Munich, Germany.
    10. Henri Teittinen & Markku Kaperi, 2022. "Exploring dishonest vulnerability in digital finance platforms ? an actor?network theory approach," International Journal of Business and Management, International Institute of Social and Economic Sciences, vol. 10(2), pages 67-79, November.
    11. Foguesatto, Cristian Rogério & Righi, Marcelo Brutti & Müller, Fernanda Maria, 2024. "Is there a dark side to financial inclusion? Understanding the relationship between financial inclusion and market risk," The North American Journal of Economics and Finance, Elsevier, vol. 72(C).
    12. Xiuxiu Jiang & Xia Wang & Jia Ren & Zhimin Xie, 2021. "The Nexus between Digital Finance and Economic Development: Evidence from China," Sustainability, MDPI, vol. 13(13), pages 1-17, June.
    13. Amar Johri & Mohammad Asif & Preeti Tarkar & Waseem Khan & Rahisha & Mohammad Wasiq, 2024. "Digital financial inclusion in micro enterprises: understanding the determinants and impact on ease of doing business from World Bank survey," Palgrave Communications, Palgrave Macmillan, vol. 11(1), pages 1-10, December.
    14. Ozili, Peterson K, 2024. "Finternet in Africa: Preparing Africa for the financial system of the future," MPRA Paper 122166, University Library of Munich, Germany.
    15. Yue, Pengpeng & Korkmaz, Aslihan Gizem & Yin, Zhichao & Zhou, Haigang, 2022. "The rise of digital finance: Financial inclusion or debt trap?," Finance Research Letters, Elsevier, vol. 47(PA).
    16. Ozili, Peterson K, 2022. "Digital financial inclusion," MPRA Paper 113789, University Library of Munich, Germany.
    17. Xiuxiu Jiang & Xia Wang & Jia Ren & Zhimin Xie, 2023. "Digital economy, agglomeration, and entrepreneurship in Chinese cities," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 44(1), pages 359-370, January.
    18. Carolina Guerini & Donato Masciandaro & Alessia Papini, 2024. "Literacy and Financial Education: Private Providers, Public Certification and Political Preferences," BAFFI CAREFIN Working Papers 24223, BAFFI CAREFIN, Centre for Applied Research on International Markets Banking Finance and Regulation, Universita' Bocconi, Milano, Italy.
    19. Sant'Anna, Dário A.L.M. & Figueiredo, Paulo N., 2024. "Fintech innovation: Is it beneficial or detrimental to financial inclusion and financial stability? A systematic literature review and research directions," Emerging Markets Review, Elsevier, vol. 60(C).

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    More about this item

    Keywords

    digital finance; microfinance; financial inclusion; financial development; financial innovation; poor people; financial technology; blockchain; fintech; regtech; sandbox; access to finance; financial services;
    All these keywords.

    JEL classification:

    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights
    • R2 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis

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