Digital financial inclusion and sustainable agriculture: an empirical analysis from rural areas of Pakistan

Purpose Sustainable agriculture is essential to reconciling agricultural productivity with environmental conservation. This paper analyses how digital financial inclusion affects sustainable agriculture and provides empirical data to support its function in encouraging sustainable farming practices. Design/methodology/approach This study uses panel data covering all provinces of Pakistan from 2014 to 2024, compiled from national statistical yearbooks and related official reports. The regional level of sustainable agriculture is estimated using the entropy method. To test the impact of digital financial inclusion, we apply panel fixed effects, mediation effect models, and a threshold regression approach. This analysis explores how the breadth, depth, and digitalisation level of financial inclusion affect sustainable agriculture, and shows that its effect strengthens notably once key threshold levels are crossed. Findings This study found a double-threshold effect: digital financial inclusion intensifies sustainable agriculture when it exceeds critical thresholds. After endogeneity and robustness testing, this finding is robust. The mechanism analysis shows that digital financial inclusion promotes technical innovation and farmer income, greening agriculture. Heterogeneity research shows that digital financial inclusion has a greater influence on sustainable agriculture in eastern Pakistan than in the central and western areas. Originality/value This paper advocates for the expansion and enhancement of digital inclusive financial services to include them in agriculture, thus establishing a sustainable development model that fosters shared wealth and environmentally friendly agriculture.