Impact of inclusive finance on private enterprise Lending: Evidence from China private enterprise survey

This study examines the relationship between financial inclusion and private enterprise loan financing. Using the China Private Enterprise Survey (CPES) database as the study sample, we find that financial inclusion has a positive effect on private enterprise loan financing, a finding that holds after a series of robustness tests. Moderating effects suggest that development strategies and government intervention negatively moderate this relationship. Heterogeneity tests show that the positive effect of financial inclusion is more pronounced in firms led by democratic party executives, limited liability companies, joint-stock companies, unlisted firms, and firms located in “downstream” provinces and western regions. Overall, this study reveals the mechanism of inclusive finance on loan financing for private enterprises, and provides practical suggestions for improving the construction of inclusive financial system.