Bridging divides: the role of Fintech and financial inclusion in reducing poverty and inequality in developing countries

This study explores the intertwined roles of Fintech and financial inclusion in addressing poverty and inequality in developing countries. Utilizing panel regression models with PCSE and FGLS methodologies, we analyze data from 108 low to upper-middle-income countries spanning 2011, 2014, 2017, and 2021. The study findings highlight Fintech's transformative impact on financial inclusion, with mobile banking complementing traditional banking in reducing poverty rates. However, the relationship with income inequality reveals a dual nature: while promoting broader access to financial services, it also poses risks of substituting conventional solutions. This underscores the necessity for policymakers to weave Fintech innovations into existing financial systems thoughtfully, promoting socioeconomic equity and sustainable development. By harmonizing modern financial technologies with traditional frameworks, our research addresses the pressing challenges of poverty (SDG 1) and income inequality (SDG 10), offering fresh insights for creating equitable financial ecosystems in emerging economies.