Fintech entry firm financial inclusion and macroeconomic dynamics in emerging economies january 2022 department of research and chief economist inter-american development bank

Financial inclusion is strikingly low in emerging economies. In only a few years, financial technologies (fintech) have led to a dramatic expansion in the number of non-traditional credit intermediaries, but the macroeconomic and credit-market implications of this rapid growth of fintech are not known. This paper builds a model with a traditional banking system and endogenous fintech intermediary creation and find that greater fintech entry delivers positive long-term effects on aggregate output and consumption.

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Author: IDB