Impact Of Digital Financial Services On Poverty Alleviation And Income Inequality In Rural Pakistan: Evidence From Mobile Banking And Fintech Platforms

Abstract

This study examined the impact of Digital Financial Services (DFS), including mobile banking and FinTech platforms, on poverty alleviation and income inequality in rural Pakistan. Using a quantitative cross-sectional design, primary data were collected from rural households and analyzed through regression, mediation, and moderation techniques. The findings revealed that DFS adoption significantly reduced poverty levels and income inequality by enhancing household income, savings, and economic resilience. Financial inclusion was found to play a crucial mediating role, indicating that the benefits of DFS are largely transmitted through improved access to and utilization of formal financial services. Furthermore, digital literacy and mobile network access significantly moderated these relationships, suggesting that the effectiveness of DFS depends on technological capabilities and infrastructure availability. The study contributes to Financial Inclusion Theory by providing empirical evidence from a developing country context and offers practical insights for policymakers and financial institutions. The results underscore the importance of expanding digital infrastructure, promoting financial literacy, and ensuring inclusive access to digital financial tools to achieve sustainable and equitable rural development.

Keywords:

Digital Financial Services; Financial Inclusion; Poverty Alleviation; Income Inequality; Mobile Banking; FinTech; Rural Pakistan