FINTECH ADOPTION AND FINANCIAL INCLUSION OUTCOMES IN MICROFINANCE INSTITUTIONS: EVIDENCE FROM KARNATAKA
DOI:
https://doi.org/10.29121/granthaalayah.v14.i4.2026.6901Keywords:
Fintech, Financial Inclusion, Microfinance Institutions, Digital Finance, Karnataka, Inclusion OutcomesAbstract [English]
Financial inclusion remains a central development objective, particularly for low-income and underserved populations who face persistent barriers in accessing formal financial services. Microfinance institutions (MFIs) have traditionally played a crucial role in bridging this gap; however, the emergence of financial technology (FinTech) has transformed the nature and scope of inclusion. This study examines the impact of FinTech adoption on financial inclusion outcomes in MFIs in Karnataka. Drawing on primary data collected from microfinance clients, the study analyzes how digital tools influence access, usage, and overall inclusion in financial services. The findings indicate that FinTech adoption has a positive and statistically significant effect on financial inclusion. The results further highlight that inclusion outcomes are influenced not only by access to digital systems but also by factors such as usability, trust, and digital capability. The study concludes that FinTech can enhance financial inclusion, provided it is supported by adequate infrastructure, user awareness, and institutional responsiveness.
Downloads
References
Arner, D. W., Barberis, J., and Buckley, R. P. (2016). The Evolution of FinTech: A New Post-Crisis Paradigm. Georgetown Journal of International Law, 47, 1271–1319. https://doi.org/10.2139/ssrn.2676553 DOI: https://doi.org/10.2139/ssrn.2676553
Beck, T., Senbet, L., and Simbanegavi, W. (2015). Financial Inclusion and Innovation in Africa. Journal of African Economies, 24(Suppl_1), i3–i11. https://doi.org/10.1093/jae/eju031 DOI: https://doi.org/10.1093/jae/eju031
Bharadwaj, P., Jack, W., and Suri, T. (2019). FinTech and Financial Inclusion. Annual Review of Economics, 11, 1–25.
Consultative Group to Assist the Poor. (2021). Digital Financial Services and Financial Inclusion. World Bank Group.
Davis, F. D. (1989). Perceived Usefulness, Perceived Ease of Use, and User Acceptance of Information Technology. MIS Quarterly, 13(3), 319–340. https://doi.org/10.2307/249008 DOI: https://doi.org/10.2307/249008
Demirgüç-Kunt, A., Klapper, L., Singer, D., and Ansar, S. (2022). The Global Findex Database 2021: Financial Inclusion, Digital Payments, and Resilience in the Age of COVID-19. World Bank. https://doi.org/10.1596/978-1-4648-1897-4 DOI: https://doi.org/10.1596/978-1-4648-1897-4
Donovan, K. (2012). Mobile Money for Financial Inclusion. Information and Communications for Development, 61(1), 61–73. https://doi.org/10.1596/9780821389911_ch04 DOI: https://doi.org/10.1596/9780821389911_ch04
Gabor, D., and Brooks, S. (2017). The Digital Revolution in Financial Inclusion: International Development in the Fintech Era. New Political Economy, 22(4), 423–436. https://doi.org/10.1080/13563467.2017.1259298 DOI: https://doi.org/10.1080/13563467.2017.1259298
GSMA. (2023). State of the Industry Report on Mobile Money.
Hair, J. F., Black, W. C., Babin, B. J., and Anderson, R. E. (2019). Multivariate Data Analysis (8th ed.). Cengage Learning.
International Institute for Population Sciences. (2021). National Family Health Survey (NFHS-5), India.
International Monetary Fund. (2022). Financial Inclusion and Fintech Developments.
Jack, W., and Suri, T. (2014). Risk Sharing and Transactions Costs: Evidence from Kenya’s Mobile Money Revolution. American Economic Review, 104(1), 183–223. https://doi.org/10.1257/aer.104.1.183 DOI: https://doi.org/10.1257/aer.104.1.183
Klapper, L., El-Zoghbi, M., and Hess, J. (2016). Achieving the Sustainable Development Goals: The Role of Financial Inclusion (CGAP Working Paper).
Kline, R. B. (2016). Principles and Practice of Structural Equation Modeling (4th ed.). Guilford Press.
Leong, K., and Sung, A. (2018). FinTech (Financial Technology): What is it and how to Use Technologies to Create Business Value? International Journal of Innovation, Management and Technology, 9(2), 74–78. https://doi.org/10.18178/ijimt.2018.9.2.791 DOI: https://doi.org/10.18178/ijimt.2018.9.2.791
Mader, P. (2018). Contesting Financial Inclusion. Development and Change, 49(2), 461–483. https://doi.org/10.1111/dech.12368 DOI: https://doi.org/10.1111/dech.12368
Manyika, J., et al. (2016). Digital Finance for All: Powering Inclusive Growth in Emerging Economies. McKinsey Global Institute.
Microfinance Institutions Network. (2023). Micrometer Report: Microfinance Sector Update.
National Bank for Agriculture and Rural Development. (2023). Status of Microfinance in India 2022–23.
National Payments Corporation of India. (2024). Unified Payments Interface (UPI) Statistics.
Ozili, P. K. (2018). Impact of Digital Finance on Financial Inclusion and Stability. Borsa Istanbul Review, 18(4), 329–340. https://doi.org/10.1016/j.bir.2017.12.003 DOI: https://doi.org/10.1016/j.bir.2017.12.003
Philippon, T. (2016). The FinTech Opportunity (NBER Working Paper No. 22476). https://doi.org/10.3386/w22476 DOI: https://doi.org/10.3386/w22476
Reserve Bank of India. (2022). Report on Trend and Progress of Banking in India.
Reserve Bank of India. (2023). Financial Stability Report.
Ryu, H. S. (2018). What Makes Users Willing or Hesitant to use FinTech? Industrial Management and Data Systems, 118(3), 541–569. https://doi.org/10.1108/IMDS-07-2017-0325 DOI: https://doi.org/10.1108/IMDS-07-2017-0325
Sarma, M., and Pais, J. (2011). Financial Inclusion and Development. Journal of International Development, 23(5), 613–628. https://doi.org/10.1002/jid.1698 DOI: https://doi.org/10.1002/jid.1698
Sekaran, U., and Bougie, R. (2016). Research Methods for Business: A Skill-Building Approach (7th ed.). Wiley.
Suri, T., and Jack, W. (2016). The Long-Run Poverty and Gender Impacts of Mobile Money. Science, 354(6317), 1288–1292. https://doi.org/10.1126/science.aah5309 DOI: https://doi.org/10.1126/science.aah5309
Venkatesh, V., Morris, M. G., Davis, G. B., and Davis, F. D. (2003). User Acceptance of Information Technology: Toward a Unified View. MIS Quarterly, 27(3), 425–478. https://doi.org/10.2307/30036540 DOI: https://doi.org/10.2307/30036540
World Bank. (2022). Digital Financial Services and Financial Inclusion.
World Bank. (2023). Financial Inclusion Overview.
World Bank. (2024). Global Financial Development Report.
Zetzsche, D. A., Buckley, R. P., Arner, D. W., and Barberis, J. N. (2017). From FinTech to TechFin: The Regulatory Challenges of Data-Driven Finance. NYU Journal of Law and Business, 14, 393–446. https://doi.org/10.2139/ssrn.2959925 DOI: https://doi.org/10.2139/ssrn.2959925
Published
How to Cite
Issue
Section
License
Copyright (c) 2026 Dr. B.A. Karunakara Reddy, Hema N
This work is licensed under a Creative Commons Attribution 4.0 International License.
With the licence CC-BY, authors retain the copyright, allowing anyone to download, reuse, re-print, modify, distribute, and/or copy their contribution. The work must be properly attributed to its author.
It is not necessary to ask for further permission from the author or journal board.
This journal provides immediate open access to its content on the principle that making research freely available to the public supports a greater global exchange of knowledge.
