A Study On The Impact Of Digital Inclusive Finance In Henan Province On The Urban-Rural Income Gap

Over the pasty decades,China has had a high pace of growth while gradually developing in an unbalanced and inadequate manner.One issue that cannot be disregarded in China at this point in time is the disparity between the incomes of urban and rural citizens.Being one of the main drivers of economic development in a country or region,finances play an important role in the formation of the rural and urban income gap in China.In theory,inclusive finance can alleviate financial exclusion,but in reality,it does not play a satisfactory role.However,the integration of inclusive finance with digital technology has complemented and improved this.With its unique advantages in terms of coverage and digitalisation,digital inclusive finance has realised the essence of inclusiveness,driving down the gap in income between towns and villages,and playing an increasing role in driving forward economic and social security.Henan is a large and strong economic province,but the obvious gap between the rich and the poor among its urban and rural residents is an ongoing and important issue that must be urgently addressed.Digital inclusive finance can help change the current urban-rural dichotomy in Henan Province,increase the revenue of less privileged people such as farmers,close the urban-rural income gap,promote harmony in society and promote a healthy and sustainable future for the economy.As such,in the context of Henan Province’s great efforts to develop digital inclusive financing,an empirical analysis of it has both certain academic value and practical significance.The first two chapters of this paper analyse the background,briefly describe the significance of the study,and comb through the existing relevant literature to understand the current focus of attention,followed by listing the theoretical basis and research hypotheses of the effects of digital inclusiveness finance on the disparity between urban and rural levels of life.Chapter 3 presents a description of the current conditions of digital inclusive financing and the urban-rural disparities in Henan Province in the past few years.Chapter 4 is the part of empirical evidence,which uses17 prefectural level cities in Henan Province from 2011-2021 as the object of study,and a fixed-effects model to research the correlation between digitally inclusive financing and the difference in income between city and rural residents in Henan Province.The empirical analysis concludes that(1)Digital financial inclusion has had a significant impact on improving income disparity between China’s urban and rural ethnic populations.To be clear,digital financial inclusion has contributed to the ability of financial facilities for the rural poor,people with low incomes and socially disadvantaged groups such as small,middle and micro enterprises,which has facilitated the improvement of their income levels,thus bringing down the urban-rural income gap.(2)All three broad sub-dimensions of digital Inclusion have a convergent effect on the urban-rural income gap,with the most significant improvement in depth of use,followed by breadth of coverage and finally digitalisation.(3)The convergence effect varies greatly across regions,with the best convergence effect in central Henan and very little effect in the north and south.In response to the results of the demonstration,this study makes several thesis and proposing measures and advice to facilitate the transfer of a digital inclusive finance in Henan Province,so that the urban-rural earning gap can be closed further and new vigor can be brought to the area’s historical and social develop.