The Development and Impact of Financial Technology (Fintech) On Financial Inclusion in Rural Communities in Indonesia: A Literature Stud

Abstract

This literature study examines the development of Financial Technology (FinTech) and its impact on financial inclusion among rural communities in Indonesia. This study shows significant growth in the FinTech sector, which is part of the digital era revolution that plays a significant role in micro and macro finance. Massive investment has driven the growth of the FinTech industry globally, driven by increased use of the internet, smartphones, and government regulatory support. Innovations in FinTech, such as digital payment systems and peer-to-peer (P2P) lending, an online platform-based practice that connects MSMEs in need of funds individuals with willingness to lend money or invest, and online investment, have expanded access to financial services for underserved communities, especially in rural areas in Indonesia. However, challenges remain, such as the gap in digital access and the importance of strong government regulations to protect consumers. This study indicates that FinTech has expanded financial inclusion, which is one of the important pillars in addressing the challenges of sustainable economic development. This study concludes with recommendations to improve the regulatory framework and encourage collaboration between FinTech companies and traditional financial institutions to maximize the benefits of financial technology for communities, especially in rural areas that have not received traditional financial services in Indonesia.