Can Digital Financial Inclusion Affect the Sense of Gains of the Poor? Review and Prospect of Chinese Studies Literature

Abstract

Poverty is a subjective feeling and value judgment, and a person's feeling of poverty is closely related to his expectation and his view of fairness. “Sense of gain” refers to a sense of satisfaction generated by a group as a result of obtaining economic and social benefits, which is a reverse definition of relative deprivation. China's rich experience in the field of digital poverty reduction finance has provided experience for more developing countries facing the challenges of digital transformation. In this paper, the systematic literature research method is used to review and sort out the relevant empirical literature on improvement of the poor groups’ financial power in China through the development of digital inclusive finance in the past decade, refine and review the research results of these literature, and discuss and explore possible research directions in the future in combination with the current reality.The development of digital inclusive finance has achieved remarkable results in enhancing the poor people's sense of obtaining financial power, whose broad consensus in academic circles exists in the facts that firstly, financial exclusion is the key factor causing poverty, especially that caused by the antagonism between urban and rural dual economic structures in China, which urgently needs to be alleviated by innovation in inclusive finance; secondly, the "sense of deprivation" regarding financial power brought by the digital divide still exists despite the significant increase in the financial access of poor farmers in recent years; and thirdly, finance affects the probability of poverty, i.e. households that are financially excluded have a higher probability of falling into poverty. There are three major risks lead to the use of Internet financial resources by poor farmers to form new types of financial exclusion with multi-dimensional and dynamic characteristics, such as instrument exclusion, assessment exclusion and self-exclusion.The digitalization in inclusive finance does not necessarily produce the expected poverty reduction result and fails to completely solve the financial exclusion. However, how to realize the fairness and common benefits of inclusive finance is an important issue concerned by domestic and foreign scholars. In the future research, three aspects should be covered as following: (1) The poverty reduction effect of inclusive finance digitalization in different economic regions and the existence of Matthew effect should be measured;(2) The research should start with the financial needs of relatively poor family units, and then consider the realistic performance of new financial exclusion.(3) It is necessary to systematically design an index system to measure the degree of the new type of financial exclusion to explore this issue in depth.