Dataset File for: "Digital Financial Inclusion and Income Inequality in the Global South: A Structural Analysis of Credit Distribution and Economic Disparities"

While existing research largely views digital financial inclusion (DFI) as an access-expanding technological innovation, less attention has been paid to how credit distribution shapes its distributive outcomes. This study examines the relationship between DFI and income inequality in the Global South, with a particular focus on the structure of credit distribution. The analysis is based on an unbalanced four-wave panel (2011, 2014, 2017, and 2021) derived from the Global Findex database and covering 32 countries. The sample comprises a core group of Global South economies and a small set of Global North countries included as a benchmark for comparative purposes. Panel estimations with panel-corrected standard errors are employed. The results show that DFI is generally associated with lower income inequality. However, this relationship is systematically associated with differences in the structure of credit distribution. In particular, a greater reliance on household-oriented credit is consistently linked to higher income inequality, alongside rising indebtedness, income polarization, and financial vulnerability, whereas credit directed toward SMEs is related to more favourable distributional outcomes. Across models employing both the Gini coefficient and the Palma ratio, shifts in lending toward households are consistent with higher inequality levels in the Global South, highlighting the importance of credit distribution in shaping the inequality patterns. These findings suggest that expanding digital access to finance does not automatically produce inclusive outcomes; instead, the distributive effects of DFI are concurrently associated with how credit is distributed within the financial system. Without policy measures that prioritize productive lending and manage household indebtedness, DFI may reinforce debt-led financialisation rather than promote inclusive development.