Gender-Inclusive Development through Fintech: Studying Gender-Based Digital Financial Inclusion in a Cross-Country Setting

Round 1

Reviewer 1 Report

The subject of the paper is very interesting. It treat the Gender-inclusive development through Fintech.  Due to its importance, this paper will be considered for publication after a minor revision taking account of the following comments and suggestions.

* The authors should improve the theoretical basis for addressing the topic of the Gender-inclusive development through Fintech.

*The choice of 104 countries as a case study should be motivated. Why the Gender-inclusive development through Fintech is crucial for the case of 104 countries.

* The authors need to improve the contribution of this study. What makes this study distinctive?

*A robustness check section should be added.

Comments for author File: Comments.pdf

Minor editing of English language required

Author Response

Comment: The authors should improve the theoretical basis for addressing the topic of Gender-inclusive development through Fintech.

Answer: Theoretical discussions are now introduced on page no. 3. 

Comment : The choice of 104 countries as a case study should be motivated. Why the Gender-inclusive development through Fintech is crucial for the case of 104 countries.

Answer: Discussion on the choice of countries is presented on page no. 6.

Comment : The authors need to improve the contribution of this study. What makes this study distinctive?

Answer: We have now discussed contribution clearly in the introduction part on page no.

3 and conclusions and policy implication part also on page no. 19.

Comment: A robustness check section should be added.

Author: We have done the robustness check of the regression models by using the instrumental variable approach and added the results in Table 7. Please see page no. 17. 

Reviewer 2 Report

The topic of the manuscript is interesting and worth research studies.

But:

The manuscript's aim should be transparent and directly given. The soundness of the manuscript goal should be the same in the Abstract and Introduction.

The Chapter Review of Literature should be in-depth and include world references in a wider way.

The Chapter Measurement of the GFII and DFIF - what type of methods were considered during the procedure selection of the methods? What are the advantages and disadvantages of the proposed approach? The manuscript has no justification for the choice of variables for the proposed method.

 

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Author Response

Comment: The Chapter Review of Literature should be in-depth and include world references in a wider way.

Answer: We have added more literature review on empirical and theoretical studies. Please see page no. 3, 4 and 5.

Comment: The Chapter Measurement of the GFII and DFIF - what type of methods were considered during the procedure selection of the methods? What are the advantages and disadvantages of the proposed approach? The manuscript has no justification for the choice of variables for the proposed method.

Answer: We have used Principal component analysis (PCA) as a pattern recognition technique to help us to identify and determine which parameter among variables is more crucial than others. Instead of being arbitrary in how we weigh our chosen variables, PCA enables us to justifiably weigh the variables based on their variability. We have explained this in several places mostly in section 2.2                            “Methodology for Constructing FI Index” on page no. 5. Also, we added briefly in section 3.2 “PCA methodology”.  We have also added the disadvantages of the PCA method on page no. 6. Based on a review of the literature and the availability of gender-specific data, the variables were chosen. We have added more reviews on page no. 8.

Reviewer 3 Report

Comments on the paper - 2391187

“Gender-inclusive development through Fintech: Studying Gender-based digital financial inclusion in a cross-country setting”

Comments on the paper:

1. It is well known that female participation in the financial system varies not only with the income level of a country, but also with the income quintile share ratios within each country. The differences by income quintile are very large in the cases of developing economies, where the proportion of the poorest population having an account at a formal financial institution is extremely low. The paper does not address the within the country financial obstacles.

2. Although we have the formal financial system to which low-income people and small enterprises do not have easy access, there is the informal financial system that could be considered in some cases as a mechanism of survival for poor people and small enterprises, along with hidden employment and underground economy. The potential role of the unofficial financial system is not considered.

3. The most important barrier to account ownership for women (as well for men) is the lack of money to use. A particular emphasis could be given to this factor. Income inequality in general, and gender income inequality in particular are the main driving forces of female financial exclusion in developing economies. Priority should therefore be given to enhancing economic development.

4. Financial accessibility is to a large extent “external” to individuals, male or female, depending mainly to institutional factors. Namely to the institutional framework in which financial institutions operate. That framework would be useful to be described and explored in the context of this research. Institutional and cultural factors should therefore be considered, such as the quality of governance, the quality of democracy, the religious beliefs, etc. These factors play an important role in forming gender development scores.

5. It would be very useful to examine some correlations between the variables examined. For example, life expectancy, fertility rate, years of schooling and GDP per capita, are strongly correlated.

6. In some variables, the unexplained part is large. The authors could provide some reasons for that.

7. Composite financial inclusion indexes have been constructed by various authors, particularly in the case of developing economies. The authors could analyse in detail the merits of their own methodology.

8. In the section of Conclusions and policy implications the authors could provide some information about the limitations of their empirical research.

The quality of english is very good. Minor corrections are only required.

Author Response

Comment: It is well known that female participation in the financial system varies not only with the income level of a country, but also with the income quintile share ratios within each country. The differences by income quintile are very large in the cases of developing economies, where the proportion of the poorest population having an account at a formal financial institution is extremely low. The paper does not address the within the country financial obstacles. Answer: Consideration of any specific country separately is beyond the scope of this study as we are dealing with 109 countries. However, as per your suggestion we have discussed India in more detail. In the conclusion and policy implication part we have added it. Please see page no. 21. Comment: Although we have a formal financial system to which low-income people and small enterprises do not have easy access, there is an informal financial system that could be considered in some cases as a mechanism of survival for poor people and small enterprises, along with hidden employment and the underground economy. The potential role of the unofficial financial system is not considered. Answer: The informal financial system is discussed in the conclusion section. Comment: The most important barrier to account ownership for women (as well as for men) is the lack of money to use. A particular emphasis could be given to this factor. Income inequality in general, and gender income inequality in particular are the main driving forces of female financial exclusion in developing economies. Priority should therefore be given to enhancing economic development. Answer: We are aware of that. However, we checked the WDI data set and we found that for a large number of countries, there is no income inequality data available continuously. Another point is that we tried to consider female-related variables and unfortunately no gender-related inequality data is available. Therefore, we discuss this point in the policy implication part. Please see page no. 21. And this could be one of the future research topics. Comment: Financial accessibility is to a large extent “external” to individuals, male or female, depending mainly on institutional factors. Namely to the institutional framework in which financial institutions operate. That framework would be useful to be described and explored in the context of this research. Institutional and cultural factors should therefore be considered, such as the quality of governance, the quality of democracy, the religious beliefs, etc. These factors play an important role in forming gender development scores. Answer: We have added the following paragraph at the end of the study. A recent study finds that the quality of governance is crucial in eliminating the trade-off and enhancing the interaction between financial inclusion (FI) and financial stability (FS) [Saha and Dutta, 2022]. Ji (2020) found that both across U.S. states and across international borders, higher degrees of religiosity are inversely correlated with the use and adoption of formal financial services. But as these variables will have a direct influence on female labor force participation or female income or education there can be multicollinearity problem.  As we have already incorporated the outcome variables such as income , employment etc we have not considered  governance or religion.   Comment: It would be very useful to examine some correlations between the variables examined. For example, life expectancy, fertility rate, years of schooling and GDP per capita, are strongly correlated. Answer: We have added the correlation coefficients of all these variables in Appendix Table 11. We also explained them on page no. 16. and highlighted in yellow color. Comment: In some variables, the unexplained part is large. The authors could provide some reasons for that. Answer: Generally, the total variance explained by all components should be between 70% to 80% variance. This may be untenable for social science research where extracted factors usually explain only 50% to 60%. In our case, it falls between 70% and 80%. Which is quite reasonable. Only one variable ‘mobile money account’ is largely unexplained due to missing data problem concerning this indicator. This problem is beyond our control. We have added this explanation on page no. 10. Comment: Composite financial inclusion indexes have been constructed by various authors, particularly in the case of developing economies. The authors could analyse in detail the merits of their own methodology. Answer: We explained it on page no. 5 in section 2.2 “Methodology for Constructing FI Index”. Also, in Appendix Table A1: Approaches towards constructing a Financial Inclusion Index, we have detailed the construction of different indices to measure financial inclusion.   Comment: In the section of Conclusions and policy implications the authors could provide some information about the limitations of their empirical research. Answer: We have added limitations of our studies in the section of the conclusion and policy implication part. Please see page no. 21.

Reviewer 4 Report

This study provides valuable insights into the intersection of gender inclusion and fintech, shedding light on the potential of digital financial services to bridge the gender gap. Well done!" "I commend the authors for addressing the crucial issue of gender-based digital financial inclusion. This research adds to understanding of how fintech can play a transformative role in empowering women economically."

I would suggest you improve the figure 2. Methodology flow chart

Author Response

Comment: I would suggest you improve figure 2. Methodology flow chart

Answer: We have improved the methodology flowchart. Please see page no. 7.

Reviewer 5 Report

Reviewer Report

 

Thanks for giving me a chance to review this manuscript. This is an interesting topic. The author(s) tries to work significantly. The author (s) aims “to fill an important research gap by developing a gender-based FI index (GFII) focusing particularly on digital services and evaluating the performance of countries across the globe”. However, still, some of the anomalies I found during the review process are addressed below, which may help further develop the study.

 

Originality

It can be improved

The author(s) should illustrate how this research differs from the literature in the field / or considered a contribution to the literature

Relationship to Literature

It can be improved

-           More studies recent and relevant to the field should be cited and used in this paper, for example:

•        Yeyouomo, A. K., Asongu, S. A., & Agyemang-Mintah, P. (2023). Fintechs and the financial inclusion gender gap in Sub-Saharan African countries. Paper presented at the European Xtramile Centre of African Studies.

·       Saima, F. N., Rahman, M. H. A., & Ghosh, R. (2022). Gender Diversity in FinTech: An Effort Towards Creating an Inclusive and Sustainable Industry. In AI-Enabled Agile Internet of Things for Sustainable FinTech Ecosystems (pp. 66-92): IGI Global.

·       Alkhwaldi, A. F., Alharasis, E. E., Shehadeh, M., Abu-AlSondos, I. A., Oudat, M. S., & Bani Atta, A. A. (2022). Towards an Understanding of FinTech Users’ Adoption: Intention and e-Loyalty Post-COVID-19 from a Developing Country Perspective. Sustainability, 14, 12616. doi:https://doi.org/10.3390/su141912616

- The previous gaps in the literature are not evident, they should be illustrated

-           While the author(s) focused on the theoretical gap (gap in the literature), they should explain the practical gap that could help to justify conducting this study, and it is recommended to cite some literature for lines 100to 115 . 

 

Methodology:

It can be improved

-           In the 3rd section (3. Methodology), the author should conclude the section by addressing why this methodology is suitable to the research context.

-           The data selected on this research should be btter justified   

Results and discussion

It can be improved

-           In the discussion section, the author(s), need to discuss the findings compared with previous research on the field and cite other scholars' work

Quality of Communication:

-           There is a need for proofreading and professional editing.

Additional Comment

·       Theoretical implications should be added

 

·       The “limitations and future work” section should be added 

Comments for author File: Comments.docx

-           There is a need for proofreading and professional editing.

Author Response

Comment: The author(s) should illustrate how this research differs from the literature in the field / or considered a contribution to the literature

Answer: we have discussed the gap in the literature and our contribution more clearly. Please see introduction and review of literature part. 

Comment: More studies recent and relevant to the field should be cited and used in this paper, for example.

Answer: We have added all suggested literature on page no. 21.

 

Comment: 

 In the 3rd section (3. Methodology), the author should conclude the section by addressing why this methodology is suitable to the research context.

•           The data selected on this research should be btter justified  \

 

Answer: we have all these discussion. 

 

Comment: In the discussion section, the author(s), need to discuss the findings compared with previous research on the field and cite other scholars' work

Answer: Please see the results section we have all discussed. 

 

Comment: There is a need for proofreading and professional editing.

Answer: We have done it. 

 

Comment: Theoretical implications should be added

Answer: Please see the introduction part. We have added theoretical argument. 

 

 

Round 2

Reviewer 3 Report

This revised version of the paper fully responds to my comments. Therefore, I popose its acceptance for publication.

 

Author Response

Thank you for accepting our paper. 

Reviewer 5 Report

No more modifications are required

 

Author Response

Thank you very much.