Research On The Poverty Mitigation Effect Of Inclusive Finance

Poverty is a common problem in the economic development of all countries in the world.Finance is the core of modern economy and is also considered as an important means to solve poverty.Compared with traditional finance,inclusive finance has been committed to providing all-round financial services suitable for its own development for all sectors of society since its inception,especially focusing on providing financial support for low-income groups and small and medium-sized enterprises,which undoubtedly helps them to increase their investment in human capital and venture capital,thus providing the possibility to get rid of poverty.At present,the research on the relationship between inclusive finance and poverty alleviation is still at the preliminary stage.What kind of poverty reduction effect inclusive finance has and what is its mechanism are all worth our in-depth research.This paper takes the impact of inclusive finance on poverty alleviation as the research theme,on the basis of combing and briefly evaluating relevant domestic and foreign literatures,and combining the relevant theories of inclusive finance and poverty,firstly analyzes the mechanism of inclusive finance on poverty alleviation from financial service channels,economic growth channels and social development channels,and further analyzes the possible non-linear relationship between inclusive finance and poverty alleviation.Then based on the panel data of 31 provincial administrative regions in mainland China from 2007 to 2016,using coefficient of variation method to determine the weight,the development index of inclusive finance in China is constructed,and the current development level of inclusive finance in China is quantitatively investigated.Data show that the development level of inclusive finance in all regions has been significantly improved,but the overall level is still relatively low,and there is a large gap among the eastern,central and western regions.Then,the systematic GMM method is applied to empirically test the relationship between inclusive finance and poverty alleviation.The study found that there is a nonlinear relationship between inclusive finance and poverty alleviation,namely U-shaped curve,and there is an inclusive finance development index that has the best impact on poverty alleviation.Inclusive finance can promote poverty alleviation when it is at a low level of development,but it may aggravate poverty when it reaches a certain level.However,in view of the fact that the development level of inclusive finance in China is relatively low,the current focus is still on vigorously developing inclusive finance.Finally,according to the empirical results,relevant policy recommendations are put forward.First of all,improve the construction of financial infrastructure and increase investment in the construction of business outlets of financial institutions,especially in the western region.Secondly,we should intensify financial innovation,especially investment in financial science and technology,to provide diversified financial services for consumers.Finally,considering the different development levels of inclusive finance in different regions,we should give full play to the guiding role of policies on financial resources,continuously optimize the allocation of resources,formulate different policies according to the development characteristics of different regions,and realize the maximum utilization of fund efficiency.