The Inhibiting Effect of Inclusive Finance over Urban-Rural Income Gap Based on Provincial-level Panel Data Threshold Model

Abstract

The urban-rural income gap expanded increasingly throughout the country has become a major contradiction that it is needed to face during the targeted poverty alleviation, stabilizing economic development and building a harmonious community, and it has been in an urgent need to develop inclusive finance, reduce financial threshold and transaction costs, loosen credit restriction in poor regions and shorten the income gap in order for a high-quality economic progress. Based on analyzing relations between inclusive finance and income gap, the article has made it clear that the inclusive finance can work well to inhibit the income gap, varying with regions as weak in the east region, followed by the middle, and strong in the west. It is concluded that to greatly promote the inclusive finance, create an inclusive finance development environment in poor areas, loosen the credit restriction over farmers and increase the income of the poor will be playing a far and deep role in improving the existing income gas in the country.