The idea of financial inclusion was first proposed by the United Nations in 2005 with the goal of offering equal financial services to all societal subjects, especially small and medium-sized enterprises (SMEs), low-income groups, and farmers. China’s idea of financial inclusion was explicitly mentioned in 2013 at The Third Plenary Session of the 18th Central Committee of the Chinese Communist Party. In order to improve the system for financial inclusion, extend the reach of financial services, and promote the growth of the real economy, The State Council of the People’s Republic of China published The Plan for Promoting the Development of Financial Inclusion (2016–2020) in 2016. Mckinnon (1973) and Shaw (1973) argued that the phenomenon of financial repression would split the capital market in a country, which would have a serious negative impact on the quality and quantity of its actual capital accumulation and hinder the development of its finance. In response, the implementation of financial inclusion can realize the deepening and further development of the financial industry and optimize the allocation of financial resources through the establishment of a sound financial system, thus, alleviating financial repression ^[1][2][1,2].

In 1987, Robert Solow observed that despite computers’ widespread use during the 1970s and 1980s, they had little impact on productivity. This is known as the “Solow productivity paradox”, stating that there is a discrepancy between investment in information technology and productivity. Subsequent research on the “Solow productivity paradox” offered various explanations including that it takes a long time for Information and Communication Technology (ICT) and internet technology to affect the economy [3]. Wan (2006)detailed the penetration of modern computer technology into all fields of economic activity, emphasizing the financial industry, which includes banking, insurance, securities, and other sectors [4]. Applications of information technology in the financial industry include electronic payment and electronic financial systems.

At present, economic growth in China, which is in the late stage of industrialization, has slowed down significantly, and internet information technology has been assigned the role of providing a new impetus. Therefore, the promotion of the “Internet+” strategy is considered as an important measure of supply-side structural reform [5]. Internet technology can reduce transaction costs and improve the efficiency of financial transactions through the rapid dissemination of information, sharing features, and network externalities, thereby improving financial transaction platforms, serving more groups, and realizing financial inclusion faster. As a result, the comprehensive integration of internet technology into economic and social sectors, especially the financial sector, will contribute to the growth of the real economy.

2. The Concept, Measurement, and Impact Factors of Financial Inclusion

The World Bank and many scholars have defined financial inclusion as the proportion of individuals and companies that have access to formal financial services. The larger this proportion in a society, the more conducive the society is to poverty reduction, to the development of sharing economy and to sustainability ^[6][7][6,7]. The development of financial inclusion is based on micro-finance, emphasizing the fairness and stability of financial development. It can make up for the shortcomings of the existing financial system to a certain extent, thus, better promoting economic development and increasing employment [6]. Currently, there is no unified definition of financial inclusion. A large number of scholars believe that inclusive finance is mainly about poverty alleviation. However, inclusive finance is related to a system that promotes the extensive participation of all financial institutions rather than focusing on an individual poverty alleviation institution. Therefore, it is not a simple poverty alleviation measure, but a way for banks and more financial institutions to jointly provide the financial services required by different groups of people and upgrade themselves to seek the sustainable development of marketization and commercialization. Internationally, more emphasis is placed on the role of inclusive finance in rural remote areas. This is because, compared with urban inclusive finance, rural inclusive finance faces greater challenges, higher transaction costs, and higher risks. Moreover, the financial environment constrains the expansion of financial services and their sustainable development in rural areas ^[8][9][10][8,9,10]. As an important part of the financial system, financial inclusion can effectively reduce financial service costs from both the supply and demand sides in poor areas and meet the financial needs of the majority [11]. In addition, financial inclusion not only promoted fairness and expanded the coverage of modern financial services but also improved the existing financial system [12]. Li (2018) also pointed out the relatively positive impact of financial inclusion on the improvement of individuals’ income, the optimization of the urban-rural dual structure, and the stimulation of domestic demand, which could promote the transformation of China’s economic growth pattern and sustainable economic development [13]. In the measurement of financial inclusion, Beck et al. (2007) first proposed two dimensions from the perspective of financial service, namely, availability and effectiveness [14]. Based on Beck’s research, Sarma (2008)created a multi-dimensional comprehensive financial inclusion index, which includes three dimensions: geographic penetration, financial service availability, and utility [15]. In China, researchers have constructed diversified financial inclusion index systems from different perspectives such as the density of policy-based financial loans, the density of cooperative financial loans, the basic medical insurance for urban employees, and the number of internet users [16]. For example, the four parameters of financial service penetration, availability, practicability, and affordability were created by Liu et al. (2018) based on Chinese context [17]. Known as the process of offering suitable financial services to low-income and underprivileged populations at a fair price, financial inclusion will be affected by both financial and social factors in terms of its level with the development of a country ^[18][19][18,19]. In other words, it is the process of ensuring that everyone, especially disadvantaged groups, has access to financial services such as deposit, withdrawal, savings, credit, and insurance in a suitable institutional and legal setting. Consequently, the development of financial inclusion will be impacted by the social economy, banking structure, and infrastructure ^{[20][21][22][23]}[20,21,22,23]. Senyo and Osabutey (2020) studied the influencing elements of ownership and use of financial services by various global groups to better interpret the development process of financial inclusion [24]. According to the report, financial inclusion may be improved to varied degrees globally by increasing financial access, fostering innovation, and reducing inequality [25].

3. The Development of the Internet

Characterized by openness and sharing, the internet is a technological and innovative advancement with wider implications for how the economy functions. The relationship between the internet and economic growth is currently the focus of research on internet development. The widespread use of information technology has significantly contributed to global economic expansion ^[5][26][5,26]. The application of continuously developing information technology and resources is a crucial way to promote economic growth [27]. For one thing, the advancement of internet technology has transformed the way that commodities are traded, removed geographical and geographic distance barriers, lowered the costs of all trading links, and fundamentally increased trading efficiency ^[26][28][26,28]. For another, it has improved the overall economic development of the manufacturing industry and the city by promoting enterprise innovation [5]. Guo and Luo (2016) analyzed this process in detail when computers are interconnected worldwide and form a global network, the development of new technologies, new inventions, and new organizations can be promoted by accelerating information dissemination, and the operating rules of various parts of the economic chain can be changed [26]. Additionally, in light of the network effect of the internet, its effect on the economic system will be magnified instantly after the network scale reaches a critical point. In addition, few studies have analyzed the impact of the internet on the industry. Shen et al. (2018) suggested that internet technology has changed the traditional mode of production and corporate organization, and the real economy has merged with the internet virtual economy [29]. Mugambi et al. (2014) argued that the internet economy has changed China’s existing demand structure, transformed the production mode, promoted the producer services industry, and upgraded the industrial structure [30].

4. The Impact of Internet Development on Financial Inclusion

Ivatury and Mas (2008) pointed out that advanced science and technology can reduce financial transaction costs and meet the financial service needs of the poor [31]. Similarly, Beck and Demirguc-Kuntand (2009) found that the use of high technology had a significant impact on the coverage of financial services in less-developed countries [7]. The internet can effectively optimize the allocation of funds, increase the operating efficiency of the financial system, reduce costs, and enhance the depth and breadth of financial services. In particular, it can provide great convenience for developing countries [32]. Information technology and internet penetration are found to be positively correlated with financial inclusion [33]. This is mainly reflected in three aspects. Firstly, they can expand information channels and enhance the concept of using financial services. Secondly, they can provide financial convenience, especially in internet finance. Thirdly, they can provide technical support for financial business innovation. According to Senyo and Osabutey (2020), internet information and communication technology not only expands the boundaries of financial services but also effectively reduces the cost of financial services, thus contributing to the sustainable commercial development of inclusive finance [24]. In practice, it is found that internet finance can serve groups in third-tier and fourth-tier cities, rural areas, and remote areas. Furthermore, World Bank (2018) proved the positive impact of internet penetration on financial inclusion and pointed out the spiraling upward trend of digital financial inclusion [34]. In areas with high population density and strong financial awareness, the development of digital financial inclusion is better. In addition, the use of the internet can greatly enhance the development capacity of digital financial inclusion, with the influence going far beyond geography and financial awareness. The diffusion effect of network externality, which is related to information technology, can be demonstrated by Moore’s Law and Metcalfe’s Law. Firstly, according to Moore’s Law, the combination of computing telecommunication indices with the growth of computing power, data storage, data availability, and electronic interconnectivity, which irreversibly changed the way financial markets operate and became a breakthrough in the development of the financial market [35]. Secondly, Shapiro and Varian (1999) indicated that Metcalfe’s law shows the external effect of the network [36]. Generated based on each internet user, the value of the network is proportional to the number of users. The more internet users there are, the greater the value of the network and its impact on the outside world.