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2022 | Buch

Introduction to Digital Financial Inclusion: Revisiting Poverty Theories in the Context of the Fourth Industrial Revolution Kapitel lesen Erstes Kapitel lesen

Digital Financial Inclusion

Revisiting Poverty Theories in the Context of the Fourth Industrial Revolution

verfasst von: David Mhlanga

Verlag: Springer International Publishing

Buchreihe : Palgrave Studies in Impact Finance

Enthalten in: Springer Professional "Wirtschaft+Technik" , Springer Professional "Wirtschaft"

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Über dieses Buch

This book is unique in that it challenges scholarly views on financial inclusion and poverty reduction while also relating financial inclusion and poverty reduction to the Fourth Industrial Revolution. The book deviates from the usual method of analyzing financial inclusion, which relies on bank accounts or microcredit as success criteria, and instead discusses how the Fourth Industrial Revolution is facilitating digital financial inclusion. With a five-fold goal, this book investigates both past and present readings and understandings of poverty and financial inclusion. To begin, it provides a thorough introduction to the Fourth Industrial Revolution and financial inclusion in the context of the Fourth Industrial Revolution. Second, the book dives quite extensively into the theories of financial inclusion in the context of the Fourth Industrial Revolution. Third, the book reconstructs the theory of financial inclusion, moving from traditional to digital financial inclusion, highlighting the role of digital financial inclusion in the transition from an informal financial money market to a formal financial system. The fourth goal is to evaluate the tools and effects of digital financial inclusion on poverty. Finally, it provides case studies of digital financial inclusion and the future of digital financial inclusion in emerging and developing countries. This book will be of interest to academics, students and practitioners in a range of disciplines, including finance, development economics, and consumer economics.

Inhaltsverzeichnis

Frontmatter

Introduction

Frontmatter
Chapter 1. Introduction to Digital Financial Inclusion: Revisiting Poverty Theories in the Context of the Fourth Industrial Revolution
Abstract
The convergence of financial services and digital technology has resulted in the formation of a significant new development paradigm to expand access to financial services. Despite the increasing adoption of technology in the financial services sector and the frequent discussions of access to money as a vital component of ongoing poverty alleviation, expanding access to the poor can frequently be a big challenge for financial institutions. This chapter’s objective is to provide the reader with an overview of the book, including its broad context, its core ideas, the organization of the book’s chapters, and other basic information about the book. The book “Digital Financial Inclusion: Revisiting Poverty Theories in the Context of The Fourth Industrial Revolution” is one of a kind because it comes up with a link to four main issues that are currently having a huge impact on the world. These issues are the Fourth Industrial Revolution Wave, which comes with opportunities and threats; poverty, which is one of the global challenges articulated in the sustainable development goal one; financial inclusion; and digital financial inclusion. In addition, this book questions the current academic discussions on financial inclusion and poverty reduction. What distinguishes this book from the existing discourse on these topics is the way it connects these ideas to the Fourth Industrial Revolution.
David Mhlanga
Chapter 2. The Fourth Industrial Revolution: An Introduction to Its Main Elements
Abstract
This chapter's main goal is to identify key distinctions between the Fourth Industrial Revolution and earlier industrial revolutions. The attributes that are a sign of all industrial revolutions are used in the chapter to demonstrate that the transition to the Fourth Industrial Revolution is a new industrial revolution. These attributes include changes in the types of technological modes because of widespread adoption of accumulated industrial innovations and systemic changes in a variety of industries, including education, finance, the manufacturing industry, and logistics, among others. The chapter emphasizes how the Fourth Industrial Revolution is unprecedented and has a variety of unique characteristics when compared to other industrial revolutions. The chapter also highlights that due to the massive developments of the Fourth Industrial Revolution, there is a global shift in the way people transacted money from old methods like visiting banks or moneylenders or paying with checks or cash to digital methods like mobile money, ATMs, and online transactions, among others.
David Mhlanga
Chapter 3. Financial Inclusion and the Fourth Industrial Revolution
Abstract
This chapter's objectives are to investigate what financial inclusion means and to outline the context in which the Fourth Industrial Revolution's technologies will affect it. Financial inclusion is defined variably in the literature, as this chapter points out. The chapter also emphasizes the fact that there are numerous theories of financial inclusion, including the beneficiary theories, the delivery theories, and the funding theories. The chapter also finds that some barriers to financial inclusion are being heavily addressed because of the technologies powering the Fourth Industrial Revolution, which is changing the financial industry. It was pointed out that information asymmetry is one of the main obstacles to financial inclusion since it makes it exceedingly difficult for other groups of individuals to get a line of credit, which greatly increases financial exclusion. However, the technologies of the Fourth Industrial Revolution are changing this by allowing excluded persons to be financially included through signalling, screening, information exchange, and digital identity construction, among other things.
David Mhlanga

Theories of Financial Inclusion in the Context of the Fourth Industrial Revolution

Frontmatter
Chapter 4. The Beneficiaries Theory of Financial Inclusion and the Fourth Industrial Revolution
Abstract
The objective of this chapter is to provide evidence for the beneficiary theory of financial inclusion from the standpoint of the Fourth Industrial Revolution. According to the theory, there are several conflicting hypotheses and points of view regarding who should benefit from the impacts of financial inclusion. Some academics believe it is the poor people, while others believe it is women, while others assert unequivocally that the economy and the financial system should benefit from financial inclusion. This chapter also emphasizes that there are other beneficiaries of financial inclusion, such as young people, old people, sick and ill people, disabled persons, and individuals who were previously unable to receive financial services because of various barriers. Theories such as the public good theory of financial inclusion, the discontent theory of financial inclusion, and the vulnerable group theory were explored in this chapter. This chapter also discusses the influence of the Fourth Industrial Revolution on the notions of financial inclusion’s beneficiaries. It also emphasizes that the Fourth Industrial Revolution affected financial inclusion from the perspective of the beneficiary theory on multiple fronts, but that the impact of its underlying technologies on the inclusion of previously disadvantaged individuals was more significant.
David Mhlanga
Chapter 5. The Delivery Agent Theory of Financial Inclusion in the Context of the Fourth Industrial Revolution
Abstract
In this chapter, the “delivery agent hypothesis” of financial inclusion is investigated. It was made abundantly evident in this chapter that, in accordance with the theory, there are a variety of opinions concerning who ought to be responsible for offering financial inclusion to the whole population. Others in the academic community believe that it should be handled by the government, while still others believe that it should be handled by a partnership between the public and private sectors. This chapter covers not just the community echelon theory of financial inclusion but also the public service theory, the special agent theory, the collaborative intervention theory, and the financial literacy theory of inclusion. As this chapter comes to a close, we talk about the effects that the Fourth Industrial Revolution had on a theory called the delivery agent hypothesis of financial inclusion.
David Mhlanga
Chapter 6. The Funding Theories of Financial Inclusion in the Context of the Fourth Industrial Revolution
Abstract
In this chapter, various ideas of financial inclusion from the funding standpoint are discussed. This chapter presents a variety of opinions on who should be responsible for funding the costs of providing financial inclusion for a nation's population. It was highlighted that several scholars think it to be the private sector, while others feel it to be the government. On the other side, others believe that rather than using public money, initiatives and programs to promote financial inclusion, it should be funded through unique interventions provided by different sources. The private money theory of financial inclusion, the public money theory of financial inclusion, and the intervention fund theory of financial inclusion are some of the theories that are examined in this chapter. The final part of this chapter focuses on the effects that the Fourth Industrial Revolution could have on the funding viewpoint of financial inclusion.
David Mhlanga

Reconstructing the Theory of Financial Inclusion: From Traditional Financial Inclusion to Digital Financial Inclusion

Frontmatter
Chapter 7. Digital Financial Inclusion in the Fourth Industrial Revolution
Abstract
This chapter discusses what it means to have digital financial inclusion in the context of the Fourth Industrial Revolution. The term “digital financial inclusion” is defined as the utilization of low-cost digital tools to offer formal financial services to demographic groups that are underserved or financially excluded. One approach to characterize it is for the excluded or underserved individuals having broad access to and usage of formal financial services through digital means. This chapter is premised on the assumption that talks about how to encourage those at the base of the economic pyramid to engage in the financial activity must increasingly address the importance of digital financial inclusion. This idea is the premise upon which this chapter is built. The chapter goes into detail about the tools and the many different components of digital financial inclusion. It also goes over the many instruments that are used for digital financial inclusion. The chapter discusses not only the function of digital financial services but also the providers of those services.
David Mhlanga
Chapter 8. The Transition from an Informal Financial Money Market to a Formal Financial System Through Digital Financial Inclusion
Abstract
This chapter shows how digital financial inclusion is helping people make the transition from the informal financial market to the formal financial system. Specifically, the chapter focuses on how digital financial inclusion is assisting people in making the shift. The connection between digital finance and financial inclusion is based on the idea that a sizeable portion of the population that is excluded has access to a mobile phone, and that the delivery of financial services via mobile phones and other related digital devices is enhancing access to finance for people who were previously excluded, such as the underprivileged, women, and youth. This enables these individuals to move from an unregulated money market to a regulated financial market, which in turn allow them to transition from being financially excluded to being financially included.
David Mhlanga
Chapter 9. Prospects and Challenges of Digital Financial Inclusion/Fintech Innovation in the Fourth Industrial Revolution
Abstract
This chapter documents the challenges associated with digital financial inclusion for diverse stakeholders, including enterprises and women. Volatility, revenue restrictions, and regional constraints are just a few of the issues that have been brought up for firms, including lack of infrastructure, weak venture capital and technology ecosystems, problems with literacy and trust, and poverty are all present. Some of the issues mentioned concerning women include limited access to official identification cards, laws that discriminate against women's account ownership, attitudes towards women's participation in the workforce and access to digital financial services, low levels of women's digital literacy and financial capability, and the fact that women are less likely than men to own a cell phone, among others. The fact that formal financial services are hard to come by in emerging nations, together with low-income levels and inadequate infrastructure, are some factors that allow digital financial services to be beneficial to firms. The chapter ends by listing the measures that can make digital financial inclusion a reality, including lowering the cost of digital services, finding ways to boost digital literacy, and using artificial intelligence to get rid of systemic prejudices, among other things.
David Mhlanga

Assessing Tools and Impact of Digital Financial Inclusion

Frontmatter
Chapter 10. The Introduction to Poverty in the Fourth Industrial Revolution
Abstract
The goal of this chapter is to discuss various relevant definitions of poverty, how the Fourth Industrial Revolution has affected those definitions, and who the poor are today. All the definitions of poverty adopted by the various schools of economic thinking over time represent a paradigm shift from monetary factors to causes of poverty to multidimensional issues like political involvement and social exclusion. The magnitude of this transition can therefore be determined by having a description of these definitions of poverty, especially in the context of the Fourth Industrial Revolution. Establishing the extent to which the Fourth Industrial Revolution has affected these definitions will be a major emphasis of the current chapter. We shall be able to determine whether poverty criteria will remain the same or change in the Fourth Industrial Revolution in this chapter. A summary of the poor in the 4IR is also included in this chapter.
David Mhlanga
Chapter 11. Channels Through Which Financial Inclusion Reduces Poverty, What is the Role of 4IR, Digital Technologies in This Process?
Abstract
The chapter's goal is to demonstrate how financial inclusion can contribute to the eradication of poverty. To determine the many ways financial inclusion can help fight poverty, a thorough assessment of the literature was conducted. The study also examines how innovations from the Fourth Industrial Revolution relate to the eradication of poverty. The chapter emphasizes how the relationship between the growth of the financial markets, economic growth, and the alleviation of poverty has been a major issue in the study of economics and interest in the connection between financial development and economic growth has increased since the start of the 2007 financial crisis. Again, the chapter demonstrates that while there are theories explaining the relationship between financial inclusion and poverty, they are not always accurate and exact. The chapter concludes by demonstrating how digital financial inclusion affects poverty.
David Mhlanga
Chapter 12. The Impact of Financial Inclusion on Poverty from the Classical Theory of Poverty in the Fourth Industrial Revolution
Abstract
This chapter seeks to discuss the impact of financial inclusion on poverty in the context of the Fourth Industrial Revolution from the classical views of poverty. The chapter assesses what it means to be poor from a classical economics point of view. It is shown in the chapter that the Classical approach to poverty is centred around the works of prominent scholars like Adam Smith and David Ricardo. In Classical economics, poverty is regarded as an outcome of poor choices by individuals and individual households. For example, poor people are regarded as people who lack self-control which will harm their productivity. The wrong choices made by individuals are viewed as the leading factors that drive individuals into poverty or the welfare trap. However, Classical economists also agree that different genetic abilities can be a potential cause of poverty among individuals. Therefore, according to classical economists, there is a minimal threshold at which government assistance is necessary to assist the poor and prevent destitution. The chapter is primarily constructed using justifications from classical economics. The impact of the advances of the fourth industrial revolution and financial inclusion on poverty are discussed to wrap up the chapter.
David Mhlanga
Chapter 13. The Impact of Financial Inclusion on Poverty from the Neoclassical Theory in the Fourth Industrial Revolution
Abstract
This chapter explains how Neoclassical economics relates to the Fourth Industrial Revolution and how financial inclusion affects poverty. This chapter evaluates what it means to be poor from a neoclassical economics perspective and whether the Fourth Industrial Revolution will affect those conclusions. This chapter explains how classical economics influenced the Neoclassical school. Marshal building on the Classical argued that in a free market economy, unequal talent endowments, skills, and capital lead to poverty. Neoclassical economics blames poverty on externalities, moral hazards, adverse selection, and insufficient knowledge. Uncertainty will aggravate poverty because impoverished people are more vulnerable to negative shocks like recessions, sicknesses, and family breakdowns. The chapter ends by addressing the Fourth Industrial Revolution's advances and their effects on poverty from a neoclassical perspective.
David Mhlanga
Chapter 14. The Impact of Financial Inclusion on Poverty: From Keynesian/Liberal Perspective in the Fourth Industrial Revolution
Abstract
This chapter attempted to investigate, against the backdrop of the Fourth Industrial Revolution, how the Keynesian theory of poverty would be impacted by financial inclusion. This chapter presented evidence that both the Keynesian theory and the liberal theory are founded on the idea that economic underdevelopment in all its manifestations is a contributing factor to poverty. Market imperfections are not the only factor considered. It was also brought up those liberals believe that economic growth has the potential to considerably boost economic development, which is an essential component in the fight against poverty. The liberal position is that the government needs to intervene at the macroeconomic level through fiscal and monetary policy to address several concerns, the most pressing of which is involuntary unemployment. Economists who subscribe to the Keynesian school of thought believe that if a society takes steps to combat involuntary unemployment, the overall rate of poverty will fall, particularly among the population that was directly afflicted by the issue. At the end of the chapter, a discussion was about how changes brought on by the Fourth Industrial Revolution and financial inclusion is influencing poverty.
David Mhlanga
Chapter 15. Financial Inclusion, and Marxian/Radical Theory of Poverty in the Fourth Industrial Revolution
Abstract
Considering the Fourth Industrial Revolution developments, this chapter sought  to analyze the effects of financial inclusion on poverty from the perspective of the Marxian/Radical theory of poverty. The chapter made clear that Marxian thinkers hold that markets are inherently dysfunctional and do not operate as they should, leading capitalists to keep wages low and keep people in poverty. The markets are fraught with multiple dangers of unemployment, which is the other problem. It was also emphasized that strict market regulation, such as setting minimum wages, may eliminate poverty in a capitalist economy. Many proponents of this school of thought think that stratified labour markets, racism, and corruption are examples of structural issues that contribute to poverty. Government regulation of the labour market is strongly advised because the labour market cannot function correctly. According to Marxian philosophy, government regulation should be focused on enhancing employees’ working conditions and encouraging better pay for them. The policy message of this school of thought is, in essence, to implement anti-discrimination laws and labour market changes. These changes are required to remove structural obstacles that serve as impediments to work and ultimately lead to poverty. The chapter is closed with a discussion of how the Fourth Industrial Revolution and financial inclusion affect poverty.
David Mhlanga
Chapter 16. Financial Inclusion, Social Exclusion, Social Capital, and Psychological Theories of Poverty in the Fourth Industrial Revolution
Abstract
The purpose of this chapter was to examine a variety of perspectives on poverty that are distinct from those represented by economic theories of poverty. It was stated in this chapter that the assumptions and conclusions of the social exclusion and social capital theories were derived from multiple disciplines, such as sociology and psychology, rather than focusing solely on economics. Even though all of the theories that were covered in earlier chapters were founded on pure economic principles, this chapter stated that the assumptions and conclusions of these theories were derived from multiple disciplines. As a core paradigm principle, social exclusion was emphasized throughout the chapter as a contributing element that leads to poverty. The chapter also demonstrated how social exclusion and social capital theories are discussed because they are based on the research of numerous social scientists who may help us to have a clear understanding of how financial inclusion and the Fourth Industrial Revolution affect poverty. The chapter ended with a discussion on the effects that financial inclusion and the developments of the Fourth Industrial Revolution have had on social exclusion, social capital, and psychological theories of poverty.
David Mhlanga

Cases Studies of Digital Financial Inclusion

Frontmatter
Chapter 17. Selected Digital Financial Inclusion Success Stories Across Developing Economies
Abstract
In this chapter, examples of successful implementations of digital financial inclusion in developing and emerging economies were provided. It was noted that access to digital financial services is common and available in the majority of wealthy countries that have highly established infrastructures in this field, including huge firms operating on a worldwide scale, advanced technology at their disposal, as well as powerful economies. This chapter provided documentation of the various success stories surrounding the topic of digital financial inclusion in developing economies in Asia and Africa. The adoption of a variety of digital financial services in China and Africa was discussed at length in this chapter. The chapter's focus was on Africa, Kenya, and China. In the conclusion of this chapter, we talked about two successful case studies for promoting financial and digital inclusion in Africa: M-Pesa and M-Tiba Kenya.
David Mhlanga
Chapter 18. Digital Financial Inclusion, and the Way Forward for Emerging Markets: Towards Sustainable Development
Abstract
The burgeoning field of digital finance has the potential to assist in the long-term development of developing countries in several ways. Two of these ways include expanding people's access to financial services in developing countries, which in turn can boost economic growth and the amount of tax revenue collected. It is also important for underserved people, including women, to have access to digital financial services so that they may participate in the modern economy. In the following chapter, we are going to zero in on the particulars of the many aspects of digital financial inclusion in the African context. Additionally, some of the opportunities for digital financial inclusion are discussed in this chapter. This is a topic that hasn't received a lot of critical attention in the previous research done on Africa. Digital financial inclusion in Africa is beneficial for users of financial services, suppliers of digital finance, governments, and the economy; nevertheless, there are still several difficulties that, if handled, might improve how well digital finance works for people, organizations, and governments. In the chapter's conclusion, some of the steps that governments ought to take were outlined in detail to ensure that digital financial services make a greater contribution to the advancement of sustainable development.
David Mhlanga
Chapter 19. The Conclusion of Digital Financial Inclusion: Revisiting Poverty Theories in the Context of the Fourth Industrial Revolution
Abstract
A new model for digital financial inclusion has emerged because of the convergence of digital technologies and the financial sector. This strategy encourages financial accessibility for everybody. This chapter provides a synopsis of the overall context, topics, and chapters of the book, in addition to extra details. The book focuses on four main topics: poverty, financial inclusion, digital financial inclusion, and the Fourth Industrial Revolution. Each of these topics is discussed in detail throughout the text. The book “Digital Financial Inclusion: Revisiting Poverty Theories in the Context of the Fourth Industrial Revolution” is one of a kind since it connects the topics of poverty, digital financial inclusion, financial inclusion, and the Fourth Industrial Revolution. This makes the book very interesting to read. This book challenges the conventional academic viewpoints on financial inclusion and the alleviation of poverty, and it differs from other works on these topics since it focuses on the Fourth Industrial Revolution in relation to these concerns.
David Mhlanga
Backmatter
Metadaten
Titel
Digital Financial Inclusion
verfasst von
David Mhlanga
Copyright-Jahr
2022
Electronic ISBN
978-3-031-16687-7
Print ISBN
978-3-031-16686-0
DOI
https://doi.org/10.1007/978-3-031-16687-7

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