Assessing the Impact of Digitalization and Digital Payments in Advancing Financial Inclusion

Abstract

This study seeks to investigate the impact of digital resource accessibility and digital payment on financial inclusion in South Asia. The scope of this examination covers accessibility and utilization dimension of the financial inclusion. The accessibility in terms of account ownership and utilization in terms of formal savings and formal borrowing. The study uses Global Findex database 2021 and employs a Logistic regression model given the binary nature of the outcome variables. The aftermaths of the regression model suggest that age, gender, education, wealth and employment status significantly influence the indicators of financial inclusion. Findings indicate that access to mobile phone and internet has higher likelihood of financial inclusion in terms of owing a bank account, formal savings and formal borrowing. Moreover, engagement of individuals with digital payment systems like credit cards, debit cards, or making or receiving payment digitally correlates strongly with higher likelihood of financial inclusion. The findings of the study have implications in underscoring the importance of tailored policies that support financial inclusion.