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

Abstract 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. Keywords: Artificial Intelligence, Financial Inclusion, Digital Lending, AI Adoption, Financial Access.