Author ORCID Identifier
Cinthya Silva: https://orcid.org/0000-0002-9243-856X
Gabriel Pino: https://orcid.org/0000-0002-9237-7942
Abstract
Financial inclusion has emerged as a transformative tool for promoting economic development, particularly among population groups who face persistent barriers to accessing traditional financial services. Yet, existing research has primarily relied on linear inequality measures, overlooking potential nonlinear dynamics. This study introduces a financial inclusion measure based on a unique Chilean policy initiative—CajaVecina—which delivers financial services for disadvantaged populations who lack personal internet connectivity, smartphones, or high levels of digital literacy, reaching in this way a population group that traditional measures of digital financial inclusion do not capture. We model the income distribution capturing effects beyond mean values. Our results show that higher levels of financial inclusion increase the mode (and mean) of the income distribution and also increases concentration around this mode value, reducing inequality among low-income households. Furthermore, the creation of micro-enterprises amplifies this effect, underscoring the complementary role of entrepreneurship in enhancing the benefits of financial inclusion. These findings provide empirical evidence on how inclusive financial technologies can decrease income inequality, offering actionable insights for policymakers seeking to reduce inequality through digitally mediated financial services.
Recommended Citation
Silva, C.,
&
Pino, G.
(In press).
Financial Inclusion and Income Distribution: Evidence from the CajaVecina Initiative among Disadvantaged Families in Chile.
Information Technology for Development.
Available at:
https://aisel.aisnet.org/itd/vol32/iss3/15