Does inclusive finance improve income: A study in rural areas

Increasing rural income is the common requirement of poverty alleviation and a rural revitalization strategy. As a financial system arrangement, inclusive finance plays an important role in rural income. This paper analyzes the influence of inclusive finance development affecting rural income. Taking 13 regions in Xinjiang as samples, we used a fixed-effects and mediating-effect model to conduct empirical tests. We found that inclusive finance development can significantly promote rural income in Xinjiang. The role of inclusive financial development in the rural income in deep poverty areas is weaker than that in non-deep poverty areas. Meanwhile, with the proposal of the Belt and Road Initiative, the role of inclusive financial development in rural income has been significantly enhanced. Taking the per capita economic output as the mechanism variable, we found that it is a vital channel for inclusive finance to improve rural income.