The Role of Financial Technology (Fintech) in Promoting Financial Inclusion A Literature Review

Abstract:
This literature review aims to examine the role of Financial Technology (Fintech) in promoting financial inclusion. As access to financial services remains a critical issue globally, particularly in underserved and marginalized communities, understanding how Fintech can contribute to expanding financial inclusion is imperative. The aim is to analyze existing literature to identify the mechanisms through which Fintech initiatives promote financial inclusion, as well as the challenges and opportunities associated with their implementation. Employing a systematic literature review approach, this research synthesizes findings from a wide range of academic papers, reports, and case studies related to Fintech and financial inclusion. The review encompasses studies that explore various aspects of Fintech, including mobile banking, peer-to-peer lending, digital payments, and microfinance, in the context of promoting financial inclusion. The literature review reveals that Fintech plays a significant role in promoting financial inclusion by overcoming traditional barriers to access, such as geographical distance, high transaction costs, and lack of formal identification. Fintech innovations enable the provision of affordable and accessible financial services to underserved populations, thereby fostering financial empowerment and economic development. However, the review also identifies challenges related to regulatory frameworks, cybersecurity risks, and digital literacy, which must be addressed to maximize the impact of Fintech on financial inclusion. The findings offer valuable insights for policymakers, financial institutions, and Fintech providers seeking to leverage technology to advance financial inclusion objectives.