Artificial Intelligence and Financial Inclusion: Empirical Evidence from Digital Lending Platforms

This research paper explores how Artificial Intelligence (AI) can be used to promote
financial inclusion using digital lending solutions. Specifically, it analyzes the relationship
between AI usage and key financial inclusion indicators: access to loans, loan approval
speed, affordability, and flexibility of loans repayment. The research employs an empirical,
quantitative research design and a sample size of 120 respondents who have had experience
using AI-enabled digital lending services. Primary data were gathered using structured
questionnaires while secondary data were gathered from financial reports of RBI, World
Bank, and IMF. The statistical analysis techniques processing data were descriptive
statistics, independent sample t-tests, ANOVA and factor analysis. The findings indicate that
digital lending services are perceived to be highly accessible (mean = 3.98) and fast (mean =
4.21) but affordability remains a problem (mean = 3.65). The rate of loan approval between
the income groups was significantly different with the high-income earners benefiting more.
The factor analysis revealed that three determinants of financial inclusion that could be
considered were accessibility, affordability and trust. The researcher concludes that AI is
making a positive impact on financial inclusion, yet more needs to be done so that it can be
affordable and trusted so that financial access can become commonplace.