Financial inclusion based on financial technology and risky behaviour of micro-finance institutes: evidence from South Asian micro-finance banks

Abstract

Purpose The purpose of this paper financial technology (FinTech) revolutions are promptly remodelling the worldwide financial industry and facilitating financial inclusion initiatives with the aid of micro-finance institutions. Such hi-tech modifications are anticipated to sell the stableness of the financial system and lessen its predominant actors’ risk-taking behaviour. However, there needs to be more practical proof to guide the effect of financial inclusion based on financial technology on the risky behaviour of South Asia micro-finance institutes. Design/methodology/approach Therefore, the authors industrialised a fresh index to calculate financial inclusion based on financial technology and empirically measure its position in decreasing the risk-taking approach of micro-finance institutes. The use of numerous robustness examinations endorsed the rationality of the authors’ outcomes. Findings Z-scoring or standard scoring outcomes of FinInc support the extant studies displaying its incredible connection with economic stability, which interprets as a terrible courting with risky behaviour of micro-finance institutes. Consequently, the authors highlighted the significance of the universality and openness of financial technology solutions in minimising risk of micro-finance institutes. Moreover, the authors concluded that financial technology is greater related to small-size micro-finance institutes. Originality/value This study currently focusing South Asia, which has not been explored before, and it is the first time to research financial inclusion with Fintech in this area.