Does the Inclusive Financial Policy Innovation Promote Rural Revitalization—A Synthetic Control Test of a National Pilot Zone for Inclusive Financial Reform

Abstract

The establishment of a pilot zone for inclusive financial reform is a major policy innovation in the modern financial system in China and has a lasting and far-reaching significance in accelerating the realization of the overall revitalization of rural areas. This paper takes the first pilot zone for inclusive financial reform (Henan Province) approved by the State Council in 2016 as a quasi natural experiment and uses the synthetic control method based on the “counterfactual” perspective and the intermediary effect model to empirically evaluate the net effect and impact mechanism of inclusive finance pilot policies on the improvement of the comprehensive level of rural revitalization. The results show that the establishment of the pilot zone for inclusive financial reform in Henan Province has significantly improved the comprehensive level of local rural revitalization, and this promotion effect has a trend of continuous acceleration after a one-year lag. In addition, the conclusion still holds after a series of robustness tests. The pilot policy of inclusive finance can positively contribute to rural revitalization development from both the supply and demand sides by enhancing the supply of rural credit and increasing the depth and density of agricultural insurance. Furthermore, the supply and demand sides have a synergistic effect in promoting rural revitalization development, although the effect is not significant at present. The above results not only improve the study of the impact of the pilot policy of inclusive finance on rural revitalization but also provide a strong reference for the formulation and implementation of rural financial reform policies. At the same time, the paper puts forward specific policy suggestions in terms of scientific promotion of the pilot zone, ensuring the supply and demand balance of “credit + insurance” and innovating the system and mechanism of the pilot zone.

1. Introduction

Under the new economical situation, China’s rural economy has changed from total inadequacy to facing a structural contradiction, and the imbalance between supply and demand has been further accentuated [1]. Therefore, the main direction of China’s agriculture-related policy reforms and improvements at this stage are to continuously promote the supply-side structural reform of rural areas, enhance the comprehensive competitiveness of agriculture, and improve the overall efficiency of the rural economy. In this context, to meet the objective needs of comprehensive rural development and further implement the rural revitalization strategy, rural inclusive finance may become an important fulcrum to pry the transformation of agricultural and rural modernization based on its characteristics of “inclusiveness and universality”. In 2016, the State Council officially agreed to carry out the construction of the pilot zone for inclusive financial reform, which kicked off the prelude to the regional rural financial reform pilot combining “top-down” and “bottom-up” approaches, and since then, three batches of “1 + 2 + 2” inclusive financial reform pilot areas have been determined, which are distributed in “five provinces and seven cities”. The pilot provinces have actively introduced special plans for the development of inclusive finance in the 14th Five-Year Plan, aiming to explore the precise poverty alleviation mode of financial services in traditional agricultural counties, old revolutionary areas, and less developed areas, as well as an effective path for rural revitalization development. In this way, the establishment of pilot zones for inclusive financial reform will have an important impact on the high-quality development of the rural economy. The first strategy is the “head goose” effect. Inclusive finance builds a low-cost, broad-coverage, multi-level modern financial system around the goals of precise poverty alleviation, rural revitalization, and common prosperity [2], leading the residents in the pilot area to give priority to income increase, poverty reduction, and consumption upgrade. The second strategy is the synergistic effect. The cooperation between inclusive finance and financial support for agriculture helps to form a sustainable development mechanism of “market + government” [3]. In addition, finance can take advantage of the new power of the digital economy and Internet technology to play an active role in the development of rural primary, secondary, and tertiary industries, and jointly promote the quality and efficiency of the rural economy. In the key process of promoting the high-quality development of the rural economy, the pilot policy of inclusive finance coincides with the national strategy of rural revitalization, both in terms of its creation goal and in the way that policy behavior combines demand-oriented and supply-side structural reform. So after several years of exploration, has the comprehensive level of rural revitalization in the pilot areas been significantly improved? What is the performance of the economic effect? And what is the mechanism? These problems urgently require the academic community to scientifically evaluate the policy effect and internal mechanism of the inclusive finance pilot project, so as to provide a useful theoretical reference and practical verification for rural revitalization during the “14th Five-Year Plan” period (1) (in the Appendix A).

This paper reviews the literature from two aspects: the impact of the inclusive finance level on rural revitalization and the impact of the inclusive finance policy on rural revitalization. Based on the current characteristics of the digital economy, the new concept of digital inclusive finance derived from the application of digital technology in the financial field has gradually become mainstream in research related to inclusive finance [4]. Regarding the impact of the development level of digital inclusive finance on rural revitalization, academics generally believe that the improvement of the level of digital inclusive finance has an obvious promotion effect on rural revitalization. For example, based on the five requirements of rural revitalization, Tian et al. [5] argued that digital inclusive finance has a positive effect on the development of rural revitalization mainly in terms of the industrial linkage effect, ecological improvement effect, civilizational edification effect, governance regulation effect and poverty reduction, and income increase effect; and they tested the dynamic positive impact of digital inclusive finance on rural revitalization through the System GMM model. Starting from the core functions of digital inclusive finance, Xie et al. [6] found that digital inclusive finance can positively influence the development of rural revitalization in several aspects, such as alleviating financial exclusion, promoting collaborative innovation, and enhancing risk control, while exploring the heterogeneous effects of digital infrastructure construction and traditional financial development on digital inclusive finance for rural revitalization. Based on the above-established fact that digital inclusive finance can help to promote rural revitalization development, some scholars have elaborated different views from two perspectives: regional heterogeneity and development stage heterogeneity. Chen [7] found that the effect of digital inclusive finance on rural revitalization has obvious regional heterogeneity; specifically, in the eastern and central regions, digital inclusive finance helps rural revitalization development, while in the western region, digital inclusive finance does not effectively promote rural revitalization development. Ge et al. [8] argued that the relationship between digital inclusive finance and rural revitalization has a “U” shape relationship of first inhibiting and then promoting. In other words, at the early stage of the development of digital inclusive finance, it cannot significantly promote rural revitalization, and only after the financial level has reached a certain inflection point will it show the promotion effect on rural revitalization. Thus, it can be seen that the relationship between digital inclusive finance and rural revitalization development may show different characteristics depending on the focus of the study. Studies on the impact of inclusive financial policy on rural revitalization are mainly qualitative. In the relevant literature empirical studies mainly focus on the following points. (1) Inclusive financial policy can help to narrow the urban-rural income gap. Li et al. [9] found that inclusive finance was able to reduce the urban-rural income gap in the early stage of development, but this policy effect was only significant in concentrated contiguous special hardship areas. Fu et al. [10] pointed out that the inclusive financial policy is generally beneficial to reduce the urban-rural income gap and that the policy reduces the urban-rural income gap by increasing the level of inclusive financial development. (2) Inclusive financial policy can help to alleviate poverty. Based on field survey data from 587 farming households in the Qinba region of China, Han et al. [11] empirically analyzed that inclusive financial policy can reduce farmers’ poverty vulnerability by improving their risk-coping capacity and that commercial insurance and farmers’ savings can significantly reduce vulnerability to poverty, while microfinance has no significant positive impact. Furthermore, Chinnakum [12] took 27 developing countries in Asia from 2004 to 2009 as the research object and used the GMM estimation method to show that inclusive financial policy can improve the living standards of poor families and reduce income inequality between rich and poor families. (3) Inclusive financial policy can help to create employment. Taking China’s county-level panel data from 2014 to 2018 as a sample, Xi et al. [13] found that the implementation of an inclusive finance plan has significant policy effects, which can improve the employment situation for the manufacturing industry in poor areas and help target poverty alleviation. Geng et al. [14] further expanded the research object to 40 countries along the “Belt and Road” route from 2010 to 2018 and found that the inclusive financial policy significantly promoted sustainable employment, especially in upper-middle-income and high-income economies, but had little effect on employment in low-middle-income economies. In addition to the above policy effects, Mwansakilwa et al. [15] used data from eastern and western Zambia to assess the impact of an inclusive finance policy on household consumption expenditure in rural areas and found that a pilot project of inclusive finance had positive consumption and welfare effects. Kochar [16], based on data from Karnataka, India, proved the effectiveness of India’s recent inclusive financial policy on rural household savings and other results. This policy was considered to have great potential to improve the welfare of the poor, mainly because it greatly reduced the cost of providing financial services to rural families through mobile technology. In summary, inclusive financial policy has played a positive role in narrowing the urban-rural income gap, alleviating poverty, promoting employment, stimulating rural household consumption, and other aspects, which also reflects the associated rural revitalization effect of the policy.

The above literature shows that there is already rich theoretical knowledge and empirical results on inclusive finance and rural revitalization development in academia. Scholars generally believe that the improvement of digital inclusive finance can promote rural revitalization development and that financial inclusion policies can indirectly reflect the effect of rural revitalization in terms of narrowing the urban-rural income gap, alleviating rural poverty, and creating employment. However, the direct relationship and influence mechanism between the inclusive finance policy itself and rural revitalization are neglected. Compared with the existing literature, the main extensions of this paper are: (1) a systematic analysis of the internal mechanism of inclusive finance policy affecting rural revitalization, and at the same time, based on the essence of inclusive finance, an analysis of the policy’s role in rural revitalization in detail, to help expand and improve the development of a theoretical system of inclusive finance reform and rural revitalization; (2) use of the first national (Henan Province) pilot zone for inclusive financial reform approved by the State Council in 2016 as a quasi-natural experiment, along with selected panel data of 26 Chinese provinces from 2008 to 2020, to explore the impact of the establishment of the pilot zone for inclusive financial reform on rural revitalization through the synthetic control method. Finally, in order to break through the limitations of the original literature, which focuses excessively on supply-side aggregate and efficiency enhancement, we use the intermediary effect model to empirically analyze the mechanism of the effect of the pilot policy of inclusive finance on rural revitalization development from the perspective of both supply and demand.

Therefore, the structure of this paper is divided into three parts. Firstly, we briefly describe the practical policy achievements of China in the construction of the pilot zone for inclusive financial reform, explore the inner mechanism of inclusive financial reform affecting rural revitalization, and put forward the corresponding research hypothesis. Secondly, we use the synthetic control method to examine the direct effect of the pilot policy of inclusive finance on rural revitalization development. Finally, from the perspective of supply and demand and of “credit + insurance”, the article uses the intermediary effect model to analyze the indirect effect of the pilot policy of inclusive finance on rural revitalization, and further investigates the synergistic effect of the supply and demand sides in promoting rural revitalization development.

2. Policy Practice and Theoretical Analysis

2.1. Policy Practice

In December 2016, with the approval of the State Council, the People’s Bank of China, together with the relevant ministries and the provincial government, issued the “Overall Plan of the Pilot Zone for Inclusive Financial Reform in Lankao County, Henan Province”, which aims to support the pilot zone by focusing on the three themes of “inclusiveness, poverty alleviation and county” and explore effective methods for inclusive finance to help the development of agriculture, rural areas, and farmers. As a result, Henan Province became the first pilot province for inclusive financial reform in China, and Lankao County became the first pilot county for inclusive financial reform in Henan Province. After the approval, the Lankao Pilot Zone gave full play to the spirit of Jiao Yulu which is realistic and pragmatic and the spirit of the first reform area, focusing on the unbalanced and insufficient aspects of the financial sector. Gradually, the inclusive financial innovation model of “one platform and four systems” (2) (in the Appendix A) was explored and formed and was also replicated and promoted in 22 pilot counties (cities and districts) in Henan Province. As can be seen, such results strongly verify the effectiveness and universality of the Lankan model of inclusive finance. After 2019, China’s pilot zone for inclusive financial reform was expanded again, with the addition of four pilot provinces in Zhejiang, Fujian, Jiangxi, and Shandong, which formed a coordinated development of the “1 + N” financial pilot pattern with the Henan pilot zone. Since the State Council announced the construction of national pilot zones for inclusive financial reform in five provinces, each pilot province has been exploring and practicing according to its own actual situation, and has achieved the following results. First, there is a clear trend of inclusive allocation of financial resources to key and weak areas. For example, the pilot zone of Jiangxi P digital inclusive finance rovince has further extended the inclusive financial service network. By the end of March 2021, 921 rural inclusive financial service stations had been established, achieving full coverage of poor villages. Second, finance and industry have formed a positive interaction situation, and farmers’ ability to increase their income and make substantial profits has been significantly enhanced. With the help of inclusive finance, modern agriculture has realized a huge transformation from “small and weak” to “specialized and deep”, and leading industries such as the agricultural processing industry have developed rapidly, which has effectively driven up the disposable income of rural residents. It is obvious that the pilot zone for inclusive finance reforms have set an example in supporting rural revitalization development and opened a new chapter for the pilot provinces to create a new atmosphere for rural development.

2.2. Theoretical Analysis and Research Hypothesis

Although the pilot zones for inclusive financial reform in each province have made differentiated model innovations according to their own resource endowment, economic capacity, and reform demand in specific practices; inclusive finance is endogenous to traditional finance, which essentially focuses on regulating the relationship between rural financial demand and supply, thus driving the development of agricultural and rural economies, and ultimately having a positive impact on rural revitalization. Based on this viewpoint, this paper focuses on the supply side and the demand side in analyzing the internal mechanism of inclusive financial reform affecting rural revitalization.

On the one hand, the establishment of the pilot zone for inclusive financial reform can stimulate the enthusiasm of supply entities to provide financial services and promote the comprehensive level of rural revitalization through the credit supply transmission mechanism. In response to the pilot policy of inclusive finance, joint efforts have been made by a number of organisations. Specifically, the relevant departments, including the China Banking Regulatory Commission (CBRC), China Securities Regulatory Commission (CSRC), and National Administration for Rural Revitalization, provided policy support in talent introduction, agricultural fund integration, project priority arrangement, etc. Banking and financial institutions used monetary policy tools to strengthen guidance and increased credit for poverty alleviation for “agriculture, rural areas, and farmers”, and small and micro enterprises through poverty alleviation refinancing and rediscounting. Local governments strengthened supporting policy information, improved software and hardware infrastructure, and consolidated the operational support of inclusive finance. Generally speaking, the impact of the pilot policy of inclusive finance on the supply side includes the following aspects. (1) It can alleviate the physical exclusion of supply subjects, reduce the operating costs of financial institutions enabling them to carry out inclusive finance and reduce the search costs of inclusive credit [17], which can further encourage the supply subject to innovate in terms of financial products and services, and promote the healthy development of specialized financial organizations. (2) The government creates and promotes innovative mechanisms for the reform of rural inclusive finance and improves the construction of soft and hard infrastructures for digital inclusive finance, which can provide a good environment for financial supply entities to improve their operational efficiency and service quality [18]. (3) Piloting inclusive finance can help to dredge the channels for finance to enter the real economy and guide all types of institutions and organizations to find the correct market positioning based on their own characteristics and give full play to their unique advantages, which can be conducive to forming a financial ecosystem of division of labor, cooperation, complementarity and co-existence of all types of financial institutions [19]. Meanwhile, the supply-side impact on rural revitalization is mainly through the following channels. (1) With the incentive of lower financing costs, financial institutions can provide more credit support to farmers and new agricultural business entities, which, together with diversified forms of government subsidies, can produce a comprehensive radiation effect for the multi-dimensional revitalization development of villages. (2) With the help of the pilot policy of inclusive finance, suppliers and demanders have more online and offline comprehensive service platforms to connect, which makes financial services “within reach” and “ for all “ and effectively bridges the “digital divide” in less developed rural areas, thus further alleviating the imbalance between urban and rural development and accelerating rural revitalization [20,21]. (3) While continuing to penetrate into rural areas, financial resources can help realize the orderly flow and balanced matching of the three major production factors of labor, land, and capital, thus accelerating the transformation of old and new dynamics in rural areas, promoting the transformation and upgrading of the rural economy, and achieving the all-round development of rural revitalization [22]. Based on the above theoretical analysis, we propose the following research hypotheses.

Hypothesis 1 (H1).

The establishment of the pilot zone for inclusive financial reform can effectively promote a comprehensive level of rural revitalization.

Hypothesis 2 (H2).

The establishment of the pilot zone for inclusive financial reform can promote a comprehensive level of rural revitalization by enhancing the supply of rural credit.

On the other hand, the establishment of the pilot zone for inclusive financial reform can increase the demand for financial loans in weak economies and stimulate their potential demand for funds; however, the proportion of rural households with insurance needs is more than 50% compared to credit needs (3) (in the Appendix A). Therefore, it can be said that the pilot policy of inclusive finance is one of the important tools to meet the insurance needs of agricultural productive service subjects and others. The impact of the pilot policy of inclusive finance on the demand side includes the following aspects. (1) Inclusive finance can create an increasing number of innovative Internet insurance products or services through emerging digital technologies, directly increasing the potential demand for agricultural insurance among farmers, which greatly increases the number of customers purchasing insurance products and accessing insurance services [23]. (2) In the process of the continuous implementation of inclusive finance, the government can continuously establish, supplement, and improve various inclusive insurance systems in rural areas, which will not only help to stabilize the basic guarantees of agricultural insurance for farmers in poor areas but also give full play to the fundamental role of “financial poverty alleviation, insurance first” [24]. Meanwhile, the demand-side impact on rural revitalization is mainly through the following channels. (1) The escalating trend for specialized, diversified, and personalized insurance needs of rural residents can help to guide and encourage insurance companies to innovate and promote special insurance products for the “three rural areas”, which on the one hand helps accelerate the advanced transformation of the agriculture-related insurance industry, and on the other hand helps rural families to resist risks, prevent large-scale poverty return, and realize rural revitalization [25]. (2) After obtaining a “risk guarantee”, farmers adjust and optimize their factor allocation according to the factor cost, income, and risk, so as to reduce the risk and loss probability and loss degree, and finally realize the improvement of agricultural profits and farmers’ operating income [26]. Based on the above theoretical analysis, we propose the following research hypotheses.

Hypothesis 3 (H3).

The establishment of the pilot zone for financial inclusion reform can promote a comprehensive level of rural revitalization by meeting the demand for agricultural insurance.

3. Materials and Methods

3.1. Research Design

The main objective of this paper is to assess the net policy effect of the establishment of the pilot zone for financial inclusion reform on regional rural revitalization. In general, the most straightforward design is the “controlled experiment” method in natural science research. That is, in two identical environments where all variables are controlled, the subjects in the control group are subject to policy intervention, but the subjects in the control group are not subject to policy intervention, and then the difference between the subjects before and after the implementation of the policy are observed. If the difference is significant, the policy implementation will prove to be valid, and vice versa. While the above experimental design is clear, it is almost impossible to explore policy effects by controlling for all internal and external environments, which is one of the major differences between the research methods of natural science and social science. In this way, it is difficult to apply the randomized controlled experiment method to the study of policy effects of inclusive financial reform. Referring to the relevant studies by Liu et al. [27] and Wang et al. [28], we can consider the establishment of the pilot zone for inclusive financial reform as a quasi-natural experiment, and use the “counterfactual framework” to compare the actual values of the experimental subjects subjected to policy intervention with their “counterfactual values” without policy intervention. The difference between the two is the net effect of the policy. At this stage, the common counterfactual assessment methods are the double difference method, the breakpoint regression method, and the synthetic control method. Specifically, the double difference method requires the control group and the experimental group to meet the common trend hypothesis before policy implementation, but this requirement is difficult, and the selection of the control group is prone to “selective bias”, which may make it difficult to accurately assess the net effect of the establishment of the pilot zone for financial inclusion reform on rural revitalization. The breakpoint regression method can accurately infer the policy effects near the breakpoints, but it is difficult to extrapolate the local policies. That is, the external validity of the conclusion is insufficient. Compared with the above two methods, the synthetic control method can effectively overcome the shortcomings of both and ensure the scientific selection of the control group and the external validity of the conclusions [29], so this method can provide a new way to evaluate the impact of the establishment of the pilot zone for inclusive financial reform on regional rural revitalization. The basic steps of the synthetic control method are: (1) select the appropriate control group and experimental group; (2) determine the outcome variables needed for the study and the predictor variables affecting the outcome variables; (3) the predictor variables of all control groups are weighted to synthesize a “counterfactual” object that is highly similar in the experimental group and the control group; (4) compare and analyze the difference between the experimental group and the synthetic “counterfactual” control group after the implementation of the policy in the sample period, and obtain the net effect of the policy; (5) in order to ensure the reliability of the conclusions, a series of robustness tests such as placebo tests and permutation tests are usually carried out on the policy effects. Specifically, the research idea of the synthetic control method applied to the assessment of the effects of the inclusive financial policy is as follows.

In this paper, the establishment of the pilot zone of inclusive financial reform is regarded as a quasi-natural experiment, and the development of rural revitalization in “1 + N” provinces can be observed. Among them, “1” represents Henan Province, which has implemented the inclusive financial pilot policy, that is, the experimental group; “N” represents other provinces that have not implemented the inclusive financial policy, that is, the control group. Let $Y_{it}$ be the level of rural revitalization in province $i$ in year $t$. $Y_{it,1}$ represents the level of rural revitalization in province $i$ that is subject to policy intervention in year $t$, and $Y_{it,0}$ represents the level of rural revitalization in province $i$ that is not subject to policy intervention in year $t$. Therefore, the net effect of the policy is ${\alpha }_{it}=Y_{it,1}-Y_{it,0}$. It is worth noting that $Y_{it,1}$ can be measured directly in the formula, while $Y_{it,0}$ cannot be measured directly, but can only be simulated by weighting all predictor variables in the control group to synthesize the “counterfactual” object. Therefore, $Y_{it,0}$ can be measured based on the parametric regression-based factor model proposed by Abadie et al. [30]. The specific formula is as follows:

$$Y_{it}={\phi }_t+{\gamma }_t{X}_i+{\vartheta }_t{\mu }_i+{\epsilon }_{it}$$

(1)

In Formula (1), ${\phi }_t$ represents the time-fixed effects for all provinces. ${\gamma }_t$ is a (1 × r)-dimensional parameter variable, and $X_i$ is a (1 × r)-dimensional observable control variable not subject to inclusive finance policy intervention. ${\vartheta }_t$ represents the (1 × F)-dimensional unobservable common factor variable; ${\mu }_i$ represents the (1 × F)-dimensional unobservable province (region) fixed effect, and ${\epsilon }_{it}$ represents the unobservable short-term random interference term with zero mean and constant variance.

In addition, to measure $Y_{it,0}$, it is necessary to give weight to the control group without policy intervention through mathematical methods, and then synthesize a “counterfactual” object that is highly similar to the experimental group to simulate the development of the level of the rural revitalization of the experimental group. The weight vector satisfies (${\omega }_2, {\omega }_3, {\omega }_4\dots {\omega }_{N+1}$) ≥ 0, and ${\omega }_2+{\omega }_3+{\omega }_4+\dots +{\omega }_{N+1}$ = 1. Therefore, the formula for the weighted non-pilot provinces is as follows:

$${\displaystyle \sum }_{n=2}^{N+1}{\omega }_n{Y}_{nt}={\phi }_t+{\gamma }_t{\displaystyle \sum }_{n=2}^{N+1}{\omega }_n{X}_n+{\vartheta }_t{\displaystyle \sum }_{n=2}^{N+1}{\omega }_n{\mu }_n+{\displaystyle \sum }_{n=2}^{N+1}{\omega }_n{\epsilon }_{nt}$$

(2)

In Formula (2), there must exist a ${\omega }_n^{*}$ that makes $Y_{1t}-\sum _{n=2}^{N+1}{\omega }_n^{*}{Y}_{nt}$ tend to 0 infinitely. At this point, ${\omega }_n^{*}$ is the optimal weight and $\sum _{n=2}^{N+1}{\omega }_n^{*}{Y}_{nt}$ can be regarded as an unbiased estimate of $Y_{1t}$. Then, it can be concluded that the policy effect of inclusive financial reform is ${\alpha }_{1t}=Y_{1t}-\sum _{n=2}^{N+1}{\omega }_n^{*}{Y}_{nt}$.

3.2. Variable Selection

3.2.1. Result Variables

Rural revitalization is a complex system project that runs through political, economic, social, cultural, and ecological fields. Only by ensuring that political, economic, social, cultural, and ecological environment objectives are highly integrated and coordinated with the Party’s objectives can we achieve the overall revitalization of the countryside. From the existing literature, most scholars build an index system to measure the level of rural revitalization according to the general requirements of “prosperous industry”, “ecological livability”, “custom civilization”, “effective governance”, and “affluent life”. Therefore, according to the overall development goal of the Strategic Plan for Rural Revitalization (2018–2022), and based on the principles of scientificity, availability, and appropriateness of data, this paper draws on the research results of Lu et al. [31], Zhang et al. [32], and Wang et al. [33] to construct an index system of China’s rural revitalization level from the above five dimensions, and uses the entropy weight method to measure the weights of each index at the criterion level and finally obtain the comprehensive level of rural revitalization. The specific composition of the index system regarding the level of rural revitalization is shown in

Table 1. Construction of the index system of the level of rural revitalization.

System Level	Guideline Level	Index Level	Unit	Symbol	Direction
Level of rural revitalization (Rur)	Prosperous industry (0.207)	Total mechanical power per capita	kW/person	X1	+
		Labor productivity	Million Yuan/person	X2	+
		Land productivity	Million Yuan/ha	X3	+
		Proportion of primary industry value added	%	X4	+
		Food production per capita	Tons/person	X5	+
	Ecological livability (0.139)	Sanitary toilet penetration rate	%	X6	+
		Greening penetration rate	%	X7	+
		Water supply penetration rate	%	X8	+
		Gas penetration rate	%	X9	+
		Intensity of fertilizer use	Kg/ha	X10	-
	Custom civilization (0.267)	Percentage of rural residents’ expenditure on education, culture, and entertainment	%	X11	+
		Number of comprehensive cultural stations in rural towns per 10,000 population	a	X12	+
		Average health technicians per 1000 rural population	a	X13	+
		Number of rural elderly institutions per 10,000 people	a	X14	+
		Number of color TV sets per 10,000 people in rural areas	a	X15	+
	Effective governance (0.228)	The average standard of minimum living security for rural residents	Yuan/person per year	X16	+
		Coverage of village committees	%	X17	+
		Percentage of the same person serving as director and secretary	%	X18	+
		Percentage of village committee members with a college education or above	%	X19	+
	Affluent life (0.159)	Rural disposable income per capita	Yuan/person	X20	+
		Ratio of urban and rural residents’ income	Yuan/person	X21	-
		Average number of computers per 100 rural households	a	Z22	+
		Per capita consumption expenditure of rural residents	Yuan/person	Z23	+
		Residential floor space per capita	Square meter	X24	+

.

3.2.2. Predictor Variables

Predictor variables in the synthetic control method often affect the fitting effect of synthetic control objects and the robustness of the conclusion. Therefore, considering the development basis of the pilot zone for inclusive financial reform, this paper selects predictor variables that can influence the outcome variables as much as possible, which mainly include six variables: (1) GDP per capita (LnpGDP); there is no doubt that the level of economic development has an impact on the revitalization of rural areas. (2) Industrial structure (Ind); Wang et al. [34] found that reducing the proportion of primary industry and animal husbandry development while increasing the proportion of rural secondary and tertiary industries can help to promote rural poverty alleviation and rural revitalization in the future. (3) Financial support for agriculture (Gov); generally speaking, local financial input can help to promote rural economic construction and maintain stable rural development. (4) The degree of investment in fixed assets per capita in rural areas (Fix); Jin et al. [35] confirmed that an increase in the proportion of fixed asset investment can attract the return of capital, talent, technology, industry, and other resource factors, which can further have an important impact on China’s agricultural economy. (5) The aging of the rural population (Age); most scholars believe that the impact of population aging on the rural economy is heterogeneous. For example, Liu et al. [36] found that aging of the population probably brings social security pressure, labor shortage, and other problems in the short term; however, after reaching a certain level, the labor shortage and rising costs caused by the disappearance of the demographic dividend can form a reverse force mechanism for the transformation of the agricultural production model, thus promoting the revitalization of rural industries. (6) The urbanization rate (Urb); Chen et al. [37] revealed that under the guidance of the two strategies of new urbanization and rural revitalization, the transformation from “urban bias” to “urban-rural integration” can help to narrow the gap between urban and rural development and promote high-quality development of the rural economy. (7) Activity of the rural market (Mar); in general, enhancing the activity of rural consumer markets can help boost domestic demand and support rural economic growth. In addition to the above variables, this paper also randomly selects the outcome variables of some years before the policy implementation as predictor variables, which are the level of rural revitalization in 2008, 2012, and 2015 (4) (in the Appendix A).

3.2.3. Intermediate Variables

Based on the above analytical description of the theoretical mechanism, the intermediate variables selected in this paper are as follows. (1) The level of rural credit supply (Cre), measured by the proportion of the balance of agricultural loans in total social loans; (2) The depth of agricultural insurance (Dep), characterized by the ratio of agricultural insurance premium income to the added value of agriculture, forestry, animal husbandry, and fishery; (3) The density of agricultural insurance (Lnden), described by the ratio of agricultural insurance premium income to the number of agricultural employees and treated logarithmically. Among these, the level of rural credit supply represents the supply-side intermediate variable; both the depth of agricultural insurance and the density of agricultural insurance represent the demand-side intermediate variables.

3.3. Data Description

Considering that the second and third batches of pilot zones for inclusive financial reform were established in a relatively short period, this paper mainly examines the net policy effect of the establishment of the first batch of pilot zones for inclusive financial reform in Henan Province on the improvement of the level of rural revitalization. In addition, due to the serious lack of data on the measurement process of the rural revitalization level, Tibet was excluded, along with four other provinces, namely Fujian, Zhejiang, Jiangxi, and Shandong. Therefore, this paper takes Henan Province as the treatment group and 25 other provinces as the control group and then conducts an empirical analysis based on the panel data of 26 provinces from 2008 to 2020. For the pilot zone for inclusive finance reform in Henan Province, the pre-policy treatment period is from 2008 to 2015, and the post-policy treatment period is from 2016 to 2020.

This paper conducts an empirical study based on panel data of 26 Chinese provinces from 2008 to 2020, with the main data obtained from the China Rural Statistical Yearbook from 2009 to 2021 and individual missing data filled in through the statistical yearbooks or statistical bulletins of each province. In addition, the data related to the coverage of village committees, such as the percentage of committees with the same person serving as director and secretary, and the percentage of members of village committees with a college education or above, are from the China Civil Affairs Statistical Yearbook. The data on the average standard of minimum living security for rural residents are from the China Social Statistical Yearbook. The data on residential area per capita is from the China Urban and Rural Construction Statistical Yearbook. The data on the balance of agriculture-related loans is derived from the China Rural Financial Services Report. The data on total social loans are from the China Financial Yearbook. The data on agricultural insurance premium income is obtained from the China Insurance Yearbook and Wind database. The data on the level of rural revitalization in each province from 2008 to 2020 is measured by the entropy weight method on the evaluation index system of rural revitalization level in Table 1. The results of descriptive statistics for the main variables are shown in

Table 2. Results of descriptive statistics for the main variables.

Variable Type	Variable Name	Symbols	Mean	St.d.	Min.	Max.
Result variables	Level of rural revitalization	Rur	0.301	0.127	0.079	0.704
Predictor variables	Per capita GDP	LnpGDP	10.636	0.529	9.18	12.009
	Industrial structure	Ind	0.477	0.093	0.298	0.837
	Financial support for agriculture	Gov	11.244	3.254	3.044	20.384
	Degree of investment in fixed assets per capita in rural areas	Fix	0.154	0.071	0.007	0.484
	Aging of the rural population	Age	11.648	3.672	5.021	26.067
	Urbanization rate	Urb	49.201	14.089	29.110	88.600
	Rural market activity	Mar	13.112	5.291	0.211	23.73
Intermediate variables	Level of rural credit supply	Cre	28.542	11.286	2.057	46.315
	Depth of agricultural insurance	Dep	1.131	1.384	0.030	9.234
	Density of agricultural insurance	Lnden	5.095	1.151	0.573	8.181

.

4. Results and Discussion

The empirical results of this paper are mainly achieved through the synth program developed by Abadie et al. The detailed steps are as follows. (1) A “synthetic Henan” is constructed by weighting the control group provinces. (2) By comparing the rural revitalization level of “real Henan” and “synthetic Henan”, the gap between the two levels in the sample period is obtained, and the policy effects of the establishment of the pilot zone for inclusive financial reform in Henan Province can be assessed. (3) A series of robustness tests, such as placebo test and permutation test, are then conducted on the policy effects to verify the reliability of the conclusions. (4) From both the supply-side and demand-side perspectives, the double difference method and the intermediary effect model are used to explore the inner mechanism of the pilot policy of inclusive finance on rural revitalization.

4.1. Weight Setting of “Synthetic Henan”

In the process of constructing the “synthetic Henan” by weighting the control group provinces, the weight vector must satisfy $\left({\omega }_2, {\omega }_3, {\omega }_4\dots {\omega }_{N+1}\right)\ge 0$ and ${\omega }_2+{\omega }_3+{\omega }_4+\dots +{\omega }_{N+1}=1$, that is, the sum of “synthetic Henan” weights is equal to 1. After the calculation of the synthetic control method, the provincial weights of “synthetic Henan” are shown in

Table 3. Provincial weights of the level of “synthetic Henan” rural revitalization.

Synthetic Provinces	Weights
Shanxi	0.494
Yunnan	0.237
Xinjiang	0.084
Hubei	0.083
Guangxi	0.060
Shaanxi	0.042

. The results show that the “synthetic Henan” rural revitalization level includes six provinces. Among them, Shanxi Province has the largest weight of 0.494, Yunnan Province has the second largest weight of 0.237, and the sum of the weights of the remaining provinces is 0.269. It is worth noting that there is no linear relationship between the weights of these six provinces, and the corresponding province categories and synthetic weights will change when the treatment group is changed, so there is no need to worry about the problem of linear endogeneity.

To further ensure the accurate assessment of the policy effect, this paper compares the mean values of the predictor variables of “real Henan” and “synthetic Henan” before the establishment of the pilot zone for inclusive financial reform in Henan Province in 2016, and the specific results are shown in

Table 4. Comparison of the mean values of the predictor variables of “real Henan” and “synthetic Henan”.

Variables	Real Henan	Synthetic Henan	Absolute Value of the Difference
LnpGDP	10.2329	10.2068	0.0261
Ind	0.3527	0.4046	0.0519
Gov	11.1938	11.8445	0.6507
Fix	0.1441	0.1375	0.0066
Age	9.4929	8.8829	0.6100
Urb	3.7170	3.8305	0.1135
Mar	17.7357	16.4458	1.2899
Rur (2008)	0.1663	0.1656	0.0007
Rur (2012)	0.2188	0.2197	0.0010
Rur (2015)	0.2578	0.2580	0.0002

. It can be seen that in the pre-policy implementation period, the predictor variables and the lagged terms of the outcome variables of “real Henan” and “synthetic Henan” are very similar, and the absolute value of the difference between the two is very small. This indicates that the synthetic control method can well fit the rural development characteristics of Henan Province before 2016. Therefore, we can test the policy effect in the next step.

4.2. Test of Policy Effect

Figure 1 shows the comparison between the rural revitalization level of “real Henan” and “synthetic Henan” from 2008 to 2020. The solid line shows the growth trend of the rural revitalization level of “real Henan”, while the dashed line shows the changing trend in the rural revitalization level of “synthetic Henan”, and the vertical line is the dividing line in 2016. As can be seen from Figure 1, before the establishment of the pilot zone for inclusive financial reform in Henan Province in 2016, the changing trends in the rural revitalization levels of “real Henan” and “synthetic Henan” are the same and show an obvious overlap, which indicates that the synthetic control method can better fit the rural development of Henan before 2016, which also responds to the data characteristics in Table 3. Since the establishment of the pilot zone for inclusive financial reform in Henan in 2016, the rural revitalization level of “real Henan” has gradually surpassed that of “synthetic Henan”, and the gap between the two has been expanding, which indicates that with the implementation of the pilot policy of inclusive finance, the level of rural revitalization of the pilot provinces will be significantly improved and gradually higher than that of the non-pilot provinces with similar rural development. It is worth noting that between 2016 and 2017, the level of rural revitalization of “real Henan” and “synthetic Henan” remained a good fit until after 2017 when the gap between them appeared to widen significantly. The possible reason is that there is a certain time lag in the policy effect of the inclusive finance pilot on the improvement of rural revitalization level.

In order to further visualize the trend in the difference between the level of rural revitalization of “real Henan” and “synthetic Henan” before and after the policy implementation, this paper uses the synthetic control method to measure the difference between the level of rural revitalization of “real Henan” and “synthetic Henan” between 2008 and 2020, shown in Figure 2. It can be seen from Figure 2 that before 2016, the gap between the rural revitalization level of “real Henan” and “synthetic Henan” always fluctuated around the “zero value”. However, after the establishment of the pilot zone for inclusive financial reform in Henan in 2016, the gap between the two showed a trend of “slight reduction–significant increase”. That is, during the period from 2016 to 2017, the gap between the level of rural revitalization between “real Henan” and “synthetic Henan” was still relatively small due to the existence of policy lag. While after 2018, the policy advantages of Henan Province were gradually transformed into development advantages, and the gap between the two gradually increased. The above results indicate that the pilot zone can significantly promote the level of the rural revitalization; and with the continuous improvement of the policy, its promotion effect becomes more and more significant, which again confirms the policy effect of the establishment of the pilot zone for inclusive financial reform in Henan Province. Therefore, the research hypothesis H1 holds.

4.3. Robustness Test

Although the above study has proved the policy effect of the establishment of the pilot zone for inclusive financial reform on the improvement of the level of rural revitalization, in order to eliminate the interference of other accidental factors on the policy effect and ensure the reliability and persuasiveness of the results, this paper selects two methods, the placebo test and the permutation test, to test the robustness of the research conclusions.

4.3.1. Placebo Test

In this paper, we refer to the placebo test method in medicine and apply it to a robustness test of the synthetic control method to verify the validity of the empirical method. The specific steps of this method are to select a province in the control group that is not part of the pilot zone for inclusive financial reform, then conduct the same synthetic control analysis on it, and finally observe whether there is a significant difference between the post-synthesis development and the actual development. The main reason for the difference is that compared with the pilot province, the selected province did not carry out the construction of the pilot zone for inclusive financial reform, so its graph will not show the same change trend as the pilot province in theory. In other words, if the synthetic control results are consistent with the trend of changes in the level of rural revitalization in Henan Province, the conclusions will not be robust, and vice versa.

Since the synthetic results show that the establishment of the pilot zone for inclusive financial reform in Henan Province can significantly improve the level of local rural revitalization, according to the general method of selecting research subjects in the placebo test, the province with the largest weight in “synthetic Henan” was selected as the test subject. This is because the greater the weight, the higher the similarity between the rural revitalization level of the selected object and that of Henan Province is. Thus the results obtained are more comparable, scientific, and authentic. As shown in Table 2, among the provinces in the control group of “synthetic Henan”, Shanxi and Yunnan have the largest weights, so it is most reasonable to select these two provinces for the placebo test, as shown in Figure 3 and Figure 4. It can be seen that the trends in the level of rural revitalization in Shanxi and Yunnan were not consistent with those in Henan Province before and after the implementation of the policy. Especially after 2016, the level of rural revitalization of “real Shanxi” and “real Yunnan” did not show signs of surpassing that of “synthetic Shanxi” and “synthetic Yunnan”. These results show that the establishment of the pilot zone for inclusive financial reform in Henan Province has significantly improved local rural revitalization, and also indicate that the policy effects generated by the construction of the pilot zone are not accidental but inevitable, and further prove the robustness of the above synthetic control results.

4.3.2. Permutation Test

In order to further enhance the validity of the study results we needed to ensure that the differences between the predictor variables of “real Henan” and “synthetic Henan” were due to the policy effects brought about by the establishment of the pilot zone for inclusive financial reform and not due to the interference of other chance factors. Therefore, this paper refers to a permutation test similar to the statistical ranking test proposed by Abadie et al. [38], which aims to judge whether the non-pilot provinces would experience a similar situation to Henan Province during the sample period and what the probability of this is. The main idea of this test is to assume that all control group provinces have carried out inclusive financial reform since 2016, and then construct synthetic control units of the corresponding provinces through the synthetic control method. Finally, we compare the actual policy effects of Henan Province with those of the control group provinces under the assumption. If the difference between the two is significant, it will prove that the effect of the establishment of the pilot zone for inclusive financial reform is significant, and vice versa.

The precondition for using the permutation test method is that the pilot provinces and synthetic control provinces have a good fitting effect before the implementation of the policy. If the fitting effect is not good before 2016, it will show a large Root Mean Square Prediction Error (RMSPE). Even if there are obvious differences in the later period, it cannot be used as the synthetic control object, otherwise, it will affect the final judgment of the policy effect. Therefore, in order to compare the real effect of the pilot policy before and after the forecast error adjustment, this paper plots the forecast error distribution of all provinces in turn, as well as the forecast error distribution of provinces that exclude the RMSPE value before 2016 that exceed 20 times the RMSPE value of Henan Province (5) (in the Appendix A). The specific distributions are shown in Figure 5 and Figure 6. On the whole, after the adjustment of prediction error, the robustness of the effect of inclusive financial policy has been greatly improved. Specifically, from Figure 6, it can be seen that before 2016, the gap between Henan Province and synthetic control provinces in terms of rural revitalization level was not large, while after 2016, the gap between Henan Province and other non-pilot provinces continued to widen, and its prediction error distribution curve gradually approached the top. Therefore, the above results once again prove the robustness of the conclusion that the establishment of the pilot zone for inclusive financial reform in Henan Province can help to promote local rural revitalization.

4.4. Further Analysis: Mechanism Test

The above results indicate that the establishment of the pilot zone for inclusive financial reform in Henan Province has had a positive impact on the development of local rural revitalization and has a certain degree of robustness. Therefore, in order to further explore the intrinsic mechanism of the impact of the inclusive financial policy on rural revitalization, this paper selects the level of rural credit supply, the depth of agricultural insurance, and the density of agricultural insurance as the supply-side and demand-side mechanism analysis paths. Referring to the test ideas of Ge et al. [39] and Zhou et al. [40], this paper indirectly validates the mechanism of the impact of the inclusive finance pilot policy on rural revitalization through the double difference method and intermediary effect model. The specific econometric model is as follows:

$$Me{d}_{it}={\beta }_0+{\beta }_{1}Di{d}_{it}+{\beta }_2{X}_{it}+{\lambda }_i+{\gamma }_t+{\epsilon }_{it}$$

(3)

$$Ru{r}_{it}={\theta }_0+{\theta }_{1}Di{d}_{it}+{\theta }_{2}Me{d}_{it}+{\theta }_3{X}_{it}+{\lambda }_i+{\gamma }_t+{\epsilon }_{it}$$

(4)

In the above equation, variables $i$ and $t$ represent regions and years; ${\beta }_0$ and ${\theta }_0$ are constant terms. $Med$ is the intermediate variable, including the level of rural credit supply (Cre), the depth of agricultural insurance (Dep), and the density of agricultural insurance (Lnden), and $Rur$ is the level of rural revitalization. $Di{d}_{it}$ is the interaction term for the pilot policy of inclusive finance, and the specific formula is $Di{d}_{it}=Trea{t}_i\times pos{t}_t$. In this formula, $Trea{t}_i$ is the inclusive finance policy variable, which takes a value of 1 for Henan Province and 0 for the control group (6) (in the Appendix A); $pos{t}_t$ is the year dummy variable, which takes a value of 0 before 2016 and 1 in 2016 and after. $X_{it}$ is the set of control variables; ${\lambda }_i$ is the region fixed effect; ${\gamma }_t$ is the year fixed effect; and ${\epsilon }_{it}$ is the random disturbance term. It is worth noting that if ${\beta }_1$ and ${\theta }_2$ are significantly positive, it will indicate that the pilot policy of inclusive finance has effectively improved the level of rural revitalization through both the supply and demand sides. That is, the intermediary effect exists and is significant.

Table 5. Results of the mechanism test.

Variables	(1) Rur	(2) Cre	(3) Rur	(4) Dep	(5) Rur	(6) Lnden	(7) Rur	(8) Rur	(9) Rur
Did	0.007 ***	0.460 ***		0.353 ***		0.740 ***
	(0.011)	(2.878)		(0.249)		(0.450)
Cre			0.002 ***
			(0.001)
Dep					0.043 ***
					(0.008)
Lnden							0.021 ***
							(0.005)
Cre×Dep								0.002
								(0.003)
Cre×Lnden									0.008
									(0.008)
Control variable	YES	YES	YES	YES	YES	YES	YES	YES	YES
Regional dummy	YES	YES	YES	YES	YES	YES	YES	YES	YES
Year dummy	YES	YES	YES	YES	YES	YES	YES	YES	YES
R2	0.432	0.596	0.811	0.773	0.846	0.742	0.831	0.487	0.496
Obs	91	91	91	91	91	91	91	91	91

Note: (1) *** indicating statistical significance at 1% levels-; (2) the values in parentheses are robust standard errors.

shows the results of the mechanism test on both the supply and demand sides. In particular, it is important to note that the above tests are performed with all control variables controlled. The results in column (1) show that the estimated coefficient of the pilot policy of inclusive finance is 0.007 and passes the significance test at the 1% level, which indicates that the policy can promote rural revitalization, and further verifies the robustness of the above conclusions. The results in columns (2) and (3) show that the inclusive financial policy positively contributes to the improvement of the comprehensive level of rural revitalization by increasing the level of rural credit supply. The coefficient of the level of rural credit supply is 0.002 and passes the significance test at the 1% level, which indicates that rural credit supply can effectively promote rural revitalization. Therefore, the above results prove that the intermediary effect of the supply side on rural revitalization development is obvious. The results in columns (4) and (5) show that the inclusive financial policy can positively affect rural revitalization by increasing the depth of agricultural insurance. In addition, the coefficient of the depth of agricultural insurance passes the significance test at the 1% level, which indicates that enhancing the depth of agricultural insurance can effectively promote rural revitalization. Similarly, the results in columns (6) and (7) show that inclusive financial reform can positively affect the development of rural revitalization by increasing the density of agricultural insurance. This also proves the obvious intermediary effect of the demand side on the improvement of the comprehensive level of rural revitalization. In contrast, in the process of promoting the comprehensive level of rural revitalization, the intermediary effect of the demand side is stronger than that of the supply side. In addition, in order to further verify whether the supply and demand sides have synergistic effects in promoting the development of rural revitalization, this paper introduces the interaction terms of the level of rural credit supply and the depth of agricultural insurance, and the interaction terms of the level of rural credit supply and the density of agricultural insurance, respectively. As the results in columns (8) and (9) show, the estimated coefficients of the interaction terms are 0.002 and 0.008, respectively, which indicates that the supply side and the demand side can cooperate synergistically to promote the development of rural revitalization, but the effect does not perform significantly at present.

In summary, the pilot policy of inclusive finance can promote the development of rural revitalization through the paths of improving the level of rural credit supply and enhancing the depth of agricultural insurance and density of agricultural insurance. In other words, the research hypotheses H2 and H3 are verified.

5. Conclusions and Policy Implications

This paper takes the first pilot zone for inclusive financial reform (Henan Province) approved by the State Council in 2016 as a quasi-natural test and uses panel data from 26 provinces (cities) in China from 2008 to 2020 to examine the net effect of the establishment of the pilot zone for inclusive financial reform in Henan Province on the improvement of the comprehensive level of rural revitalization through the synthetic control method. Furthermore, from the two perspectives of the supply side and the demand side, we use the double difference method and the intermediary effect model to verify the internal mechanism of the impact of the pilot policy of inclusive finance on rural revitalization. The main findings are as follows. (1) The establishment of the pilot zone for inclusive financial reform in Henan Province has significantly improved the comprehensive level of local rural revitalization, and this finding still holds after a series of robustness tests. (2) There is a one-year policy lag period while the inclusive financial pilot is working positively for rural revitalization. (3) The mechanism analysis shows that the pilot policy of inclusive finance can positively contribute to the improvement of the level of rural revitalization from both the supply and demand sides through the paths of improving the level of rural credit supply and increasing the depth and density of agricultural insurance. (4) Further analysis reveals that the interaction term between the supply side and the demand side can promote the development of rural revitalization, but the synergistic effect is not significant at present. Combined with the above empirical results, this paper fully affirms that the pilot zone for inclusive financial reform in Henan Province, as the first national pilot zone in China, has formed several reproducible and replicable models in the practice of the three themes of “Inclusiveness, Three Rural Areas and Poverty Alleviation”, and has provided a strong reference for the development of inclusive finance and rural financial reform in China. Based on the above research conclusions, this paper reveals the following policy implications.

Firstly, the experience of the pilot zone for inclusive financial reform in Henan Province proved that the pilot zone has had an obvious positive impact on local rural revitalization. Therefore, the government should firmly implement the pilot policy of inclusive finance and scientifically promote the construction of the pilot zone for inclusive financial reform. Given the lag of the pilot policy in promoting rural revitalization, it is necessary for local governments to introduce specific, detailed, and operable implementation rules, to fully guarantee that rural low- and middle-income communities can enjoy financial inclusion as soon as possible.

Secondly, we should fully realize the key role played by the level of rural credit supply, the depth of agricultural insurance, and the density of agricultural insurance in the pilot policy of inclusive finance to promote the development of rural revitalization. Considering that the intermediary effect played by the demand side is stronger than that played by the supply side, the rural revitalization strategy should be used as an opportunity to further expand the coverage of agricultural insurance and promote livelihood-related agricultural insurance with the push of inclusive financial reform policy. For example, agricultural production facilities should be included in the scope of insurance to support the development of local special industries in rural areas and mobilize farmers’ enthusiasm to start their businesses and make money. The weak intermediary effect of the supply side is ultimately down to the problem of insufficient supply of rural credit. Therefore, work to expand the scale of rural credit institutions should be continued, supplemented by improving preferential policies for agriculture-related loans and optimizing the scale and structure of upgrading institutional transactions, so as to promote the smooth development of farmers’ financial education and investment, agricultural production and operation, innovation and entrepreneurship, and other related activities. These initiatives will help to achieve an effective match between rural credit supply and insurance demand, and further alleviate the structural contradiction between supply and demand in rural agriculture.

Thirdly, since inclusive financial policy in each pilot area should function according to the area’s economic level, labor force, resource endowment, urban and rural infrastructure, and other development environments, in order to truly maximize the effectiveness of the rural revitalization policy, each pilot zone should learn from successful experience in a natural and dialectical manner and eliminate those development models that are not in line with local conditions, so as to avoid the serious diminution or even zero effectiveness caused by “blindly following the model” in a new environment. In addition, for each pilot zone there needs to be an innovative institutional mechanism of “precise poverty alleviation + benefit linkage + prevention of return to poverty”, and the number, age structure, and physical condition of low- and middle-income people in rural areas should be ascertained in order to carry out targeted financial inclusion projects to help poorer residents to increase their income and make a profit.

Although this paper empirically tested the policy effect of the establishment of the pilot zone for inclusive financial reform on rural revitalization development, there are three deficiencies in the study. Firstly, due to the time span limitation, we did not include the four provinces’ pilot zones for inclusive financial reform set up in 2019 and 2020 in the core research objective, but only discussed the impact of the establishment of a pilot zone for inclusive financial reform on rural revitalization in Henan Province. To some extent, this limits the depth of the research conclusions. Secondly, from a financial perspective this paper discussed the indirect impact of the inclusive finance pilot policy on rural revitalization development in terms of both supply and demand. However, the impact could also be explored from other perspectives, such as industrial agglomeration, environmental governance, talent drainage, etc. Thirdly, this paper only discussed the policy effect from 2008 to 2020. It is necessary to further investigate the long-term effect of the pilot policy of inclusive finance on rural revitalization development in the future.