The Impact of Digital Inclusive Finance on Rural Poverty Reduction: Empirical Evidence from Rural Areas in China

Abstract

China achieved comprehensive poverty eradication in 2020 and has now entered a new phase focused on addressing relative poverty. Harnessing the power of Digital Inclusive Finance to alleviate relative poverty is of paramount importance. Based on field research conducted in several rural regions of China, this paper delves into the effects and underlying mechanisms of Digital Inclusive Finance on rural poverty reduction, and proposes corresponding policy recommendations. Utilizing the Logit model and mediation effect model, the study calculates the Digital Inclusive Finance Index, identifies multidimensionally relative poor households, and analyzes the impact of Digital Inclusive Finance on multidimensional relative poverty among rural households, further exploring its influence mechanisms. The results indicate that Digital Inclusive Finance significantly mitigates rural relative poverty by enhancing farmers’ willingness to engage in e-commerce and bolstering health awareness. Drawing on these findings, the paper presents policy suggestions for the development of rural Digital Inclusive Finance from various perspectives.