The Role of Fintech in Promoting Financial Inclusion in Developing Countries: THE CASE OF MEXICO

  • Financial inclusion is globally on the rise since 2011; however, still, nearly 1.7 billion adults worldwide do not have a bank account at a formal institution (Demirguc- Kunt et al, 2018). Supply, demand and societal factors may lead to barriers to financial inclusion, and accelerate voluntarily and involuntarily exclusions in the developing countries (World Bank, 2008; Beck and De La Torre, 2006; Beck el at, 2008). With the mobile phone technology and advancements in the innovations, the number of participants has increased with the entrance of new challenger i.e. Fintech startups, in the financial services market. The literature reveals that Fintech has a great potential to broaden access to financial services through lowering costs, reducing information asymmetries, enabling more transparency, increasing competitiveness, etc. This thesis analyzes the role of Fintech in promoting financial inclusion with the case of Mexico, approaching the lack of financial inclusion issue from the perspective of the household. To approach this issue, one of the objectives of this thesis is to investigate the barriers refraining households from accessing and using financial services. In Mexico, more than half of the adult population do not have a bank account at a formal institution including mobile money account (Demirguc-Kunt et al, 2018). The G20’s financial inclusion indicators revealed that account ownership as well as saving and borrowing at financial institutions has decreased since 2014. The main barriers are the difficulties to use financial services, financial illiteracy and insufficient financial infrastructure leads to barriers to financial inclusion in Mexico. Ideally, Fintech has a great potential to reduce the barriers to financial inclusion and promote access to and use of financial services for the people who are excluded by traditional financial institutions due to prohibitive prices, lack of documentation, etc. However, Fintech alone is not sufficient to transmit its full potential benefits. Even though Fintech ecosystem is growing rapidly in Mexico, and seen as a potential solution for lack of financial inclusion issue in Mexico, this study reveals that Fintech ecosystem couldn’t achieve its potential in Mexico so far.

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Metadaten
Author:Kübra Hazal Zedeli
Referee:Jennifer Pédussel Wu
Advisor:Martina Metzger
Document Type:Master's Thesis
Language:English
Date of first Publication:2019/12/20
Publishing Institution:Hochschulbibliothek HWR Berlin
Granting Institution:Hochschule für Wirtschaft und Recht Berlin
Date of final exam:2019/07/22
Release Date:2019/12/20
Page Number:60
Institutes:FB I - Wirtschaftswissenschaften / International Economics M.A.
Licence (German):License LogoUrheberrechtsschutz