Fintech Driven Financial Inclusion: The Case of Vietnamese Households

Abstract

Many cross-country studies find the significant role of Fintech in accelerating the pace of financial inclusion, filling a gap left by traditional service providers , delivering affordable , suitable financial services to the poor. Vietnam is one of the countries having the lowest financial inclusion state with merely 31% of adults having an account at a formal financial institution. However, the country is among the emerging fintech markets in the region with an increasing rate of digital penetration. Contributing to the increasing literature on digital inclusive finance, our research investigates the effects of Fintech on financial inclusion in Vietnam. The paper uses the data on Vietnam's digital financial inclusion stage and households in two years 2018 and 2020. The data on households is obtained from the Vietnam Household Living Standard Surveys (VHLSSs) in 2018 and 2020. In general, Vietnamese households have low access to all formal financial services. In addition, the popularity of using Fintech products such as mobile and internet banking services and online payment has a significant impact on household usage of savings, accounts, ATMs, and credit cards.