Can microfinance mitigate the adverse effects of digitalization on poverty in developing countries? This study examines the moderating role of microfinance in addressing the digital divide and its impact on poverty. The research recognizes the importance of digital technology for business and economic development, while also acknowledging its potential to exacerbate existing inequalities. The study employs an econometric method based on two-stage least squares (2SLS) to estimate the relationship between digital technologies, poverty, and microfinance. The findings confirm that microfinance can play a significant role in mitigating the adverse effects of digitalization on poverty, providing a pathway for the poor to benefit from technological advancements. Thus, governments should prioritize and encourage the integration of digital technologies with robust microfinance systems to effectively combat poverty. These results suggest that governments should prioritize policies that integrate digital technologies with robust microfinance systems to effectively combat poverty. By providing the necessary assistance, microfinance can help bridge the digital divide and ensure that the poor are not left behind in the digital age.
Published in the Journal of Strategy and Management, this paper contributes to the journal's focus on strategic decision-making and organizational performance. By examining the interplay between digital technology, microfinance, and poverty reduction, the study provides insights relevant to development strategy and social impact, aligning with the journal's scope.