Can digital financial inclusion promote female entrepreneurship? Evidence and mechanisms

Female entrepreneurship is important for business and economic development. However, women face greater obstacles than men in accessing financing and information, making it more difficult for them to engage in entrepreneurship. This paper examines the impact of digital financial inclusion on female entrepreneurship by using a national sample consisting of matched data from a digital financial inclusion index and a nationally representative survey. The results show that digital financial inclusion significantly promotes women’s entrepreneurial behavior. We find that digital financial inclusion can ease women’s financing constraints and provide business information to alleviate their information constraints. Furthermore, the development of digital financial inclusion improves women’s work flexibility, inspiring them to engage in entrepreneurship. In addition, digital financial inclusion has a greater effect on entrepreneurship among vulnerable women, such as those with less education or a lack of financial autonomy and those living in areas with high gender inequality, which supports the idea that digital financial inclusion can empower women.