The Role of FinTech Lending Platforms in Expanding Credit Access and Financial Inclusion in Developing Countries

Posted: Mar 28, 2023

• Scarlett Jones
• Scarlett Martin
• Sebastian Walker

Abstract

This research examines the transformative impact of financial technology (FinTech) lending platforms on credit accessibility and financial inclusion in developing economies. Traditional banking systems in these regions have historically failed to serve significant portions of the population due to infrastructural limitations, high operational costs, and stringent credit assessment methodologies. Our study introduces a novel methodological framework that combines machine learning algorithms with alternative data sources—including mobile phone usage patterns, social media behavior, and digital transaction histories—to develop more inclusive credit scoring models. We conducted a comprehensive analysis of over 50,000 loan applications across three developing countries (Kenya, Indonesia, and Colombia) through partnerships with emerging FinTech lenders. The findings demonstrate that FinTech platforms have expanded credit access to previously unbanked populations by 47