Beyond infrastructure: evaluating the financial inclusion effects of China’s BRI participation across partner economies

This study analyzes the impact of participation in the Belt and Road Initiative (BRI) on financial inclusion across 135 countries from 2007 to 2021. Using an Ordinary Least Squares Interrupted Time Series Analysis (OLS-ITSA), the findings show that BRI participation significantly improves access to financial infrastructure, particularly through increased Automated Teller Machines (ATM) penetration in low- and middle-income countries. However, a decline in life insurance usage and slight increases in borrowing, deposits, and Small Medium Enterprises (SME) lending suggest persistent gaps in broader financial participation and a continued household preference for liquidity. Foreign direct investment (FDI) under the BRI primarily supports traditional financial infrastructure, with limited spillovers into digital finance and SME financing. The outcomes of financial inclusion are also affected by macroeconomic variables such as Gross Domestic Product (GDP) per capita, inflation, and internet penetration. The findings demonstrate how infrastructure investments can alter financial accessibility and align with institutional theory and innovation diffusion models. The study concludes that realizing the full financial inclusion potential of the BRI requires complementary reforms, particularly in digital and institutional finance.