Research shows that digital financial inclusion (DFI) promotes entrepreneurship among migrant workers and women

China has been putting securing and expanding employment, especially for college graduates and migrant workers, as a priority goal of economic and social development since the outbreak of COVID-19 epidemic.


On January 29, 2021, to further the development of digital technology in China and beef up its support for financial innovation, the Second Symposium of “Peak Initiative of Digital Finance Open Research” in 2020~2021 was held online by the Chinese Academy of Financial Inclusion (CAFI) of Renmin University of China. The conference focused on the role of DFI in the fight against COVID-19 and the development of micro businesses and vulnerable groups, explored how digital technology can better serve the real economy, especially micro businesses and vulnerable groups, in the context of pandemic containment, and how DFI can strike a balance between innovation and regulation and bring greater benefits to society. An empirical research result on “the role of DFI in job creation” was released at the seminar.


In the opening speech, Dr. Duoguang Bei, President of CAFI, pointed out that from the research perspective, digital finance can be examined in a broader context; from the practice perspective, the value of DFI is not only reflected in helping MSMEs and creating jobs, but it also enables all types of institutions to have a more convenient “digital channel” to provide financial services to provide financial services to MSMEs. Improving the financial inclusion system can contribute to the development of high-quality inclusive finance during the 14th Five-Year Plan (2021-2025).



The employment of migrant workers is significant for economic development, social stability and improvement of people’s wellbeing. In this regard, the research results of Professor Yan Zeng’s team at the Lingnan (University) College of Sun Yat-sen University show that DFI significantly facilitates farmers to start up their businesses and enhances their business income.


According to Prof. Zeng’s team, the above effects are mainly achieved through convenient, efficient and unsecured credit support, improved individual digital skills and lowered startup threshold for migrant workers.


The research team also found that DFI has a stronger incentive effect on farmers in the underdeveloped central and western regions, and on female farmers.


“Internet-based DFI can provide wider access to credits for women farmers, enabling them to obtain financing more easily and quickly, and to make mobile payments, so they have more possibilities to start their own businesses while taking care of their families. In addition, women tend to be more patient in collecting information provided by DFI platforms and pay more attention to information processing of user experience, emotions, communication and interaction, among others, which helps them build social networks and expand social capital accumulation with the help of the Internet.” Zeng explained.


The survey shows that digital technology has a positive effect on promoting employment and entrepreneurship for specific groups, and merchants on digital platforms have a strong job creation capacity for older and elderly laborers, migrant workers, flexible employees, and college graduates. Digital platforms can provide short-term transitional job opportunities to some recent college graduates, easing the employment anxiety and financial constraints of recent graduates with employment difficulties under the impact of COVID-19.


The survey also shows that jobs generated by digital platforms have played a positive role in improving the income of workers. Nearly 80% of the jobs have an average monthly income of over 4,000 yuan, 30% over 8,000 yuan; meanwhile 62.1% of migrant workers earned over 4,000 yuan from digital platforms and 13.4% over 8,000 yuan. Recently, the National Bureau of Statistics of China announced that the average monthly income of migrant workers in China was 4,072 yuan in 2020, an increase of 2.8% over 2019.


The development of China’s digital economy has also provided new ideas for securing employment. The emergence of new industries, new values, and new business models has given rise to a number of new jobs that are digital, intelligent and IT-based.


Yun Chen, Deputy Director of the Office of Employment and Business Start-up Research, Chinese Academy of Labour and Social Security (CALSS), introduced at the symposium that of all the policies dealing with COVID-19 in 2020, the role of financial services in the real economy was under the spotlight. Throughout the year, the banking sector has extended debt service on a total of 7.3 trillion yuan of loans and issued a total of 3.9 trillion yuan of microcredit, an increase of 1.6 trillion yuan year-on-year. A total of 32.28 million business entities were supported, 5.24 million more than in 2019.


According to Yun Chen, digital transformation has become a key driving force for employment. The industry-wide transformation, upgrading and structural adjustment caused by digitalization will certainly have a comprehensive, profound and long-lasting impact on the supply and demand and the structure of the labor market. The main role of fintech in helping to secure and preserve employment is manifested in the following six aspects: 1. realizing capital flow through contactless online payment and loans, keeping market players afloat and thus securing jobs; 2. promoting the resumption of production, full operation, economic circulation and the rebound of labor market demand by boosting consumption ; 3. supporting start-ups and job creation through inclusive finance; 4. creating new occupations and expanding new space for employment; 5. creating jobs for specific regions and workers, and easing structural pressure; 6. avoiding layoffs, and providing job opportunities for workers who temporarily cannot enter the labor market normally, and smoothing unemployment risks.