Fintech Contribution in promoting financial inclusion among underserved populations: An Empirical analysis

Abstract

Fintech plays a crucial role in enhancing financial inclusion for underserved individuals who lack access to traditional banking systems. Yet, 1.4 billion adults remain unbanked, primarily due to geographical barriers, poverty, gender disparities, and inadequate digital infrastructure. This research investigates the impact of Fintech, with an emphasis on mechanisms and mediators such as digital literacy and contextual elements that influence its effectiveness. A systematic review was conducted on 385 peer-reviewed articles (2015-2024) sourced from Scopus, Web of Science, IEEE Xplore, Google Scholar, and PubMed across 28 emerging and developing economies (involving over 1,500 individuals and 450 MSMEs). Various analytical methods including PLS-SEM, GMM, panel/logistic
regression, bibliometrics, and descriptive statistics were employed to correlate Fintech adoption with financial inclusion outcomes. The findings indicate a significant positive effect of Fintech adoption (β=0.68, p<0.001), mediated by digital literacy (indirect=0.42, p<0.01) and moderated by regulatory conditions (β=0.35, p<0.05). Mobile banking and digital payments are highlighted as leading factors contributing to improved inclusion rates (7.2% increase in inclusion for every 10% rise in adoption),aligning with Sustainable Development Goals (SDGs) 1, 8, and 10. In summary, while Fintech enhances financial inclusion through improved literacy and supportive regulations, addressing gaps in infrastructure security issues and behavioral challenges is essential for maximizing its potential.