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Digital Financial Inclusion And The Level Of Financial Development

Author

Listed:
  • Sasho Arsov

    (Faculty of Economics-Skopje, Ss. Cyril and Methodius University in Skopje, North Macedonia)

  • Aleksandar Naumoski

    (Faculty of Economics-Skopje, Ss. Cyril and Methodius University in Skopje, North Macedonia)

  • Pece Nedanovski

    (Faculty of Economics-Skopje, Ss. Cyril and Methodius University in Skopje, North Macedonia)

Abstract

The paper explores the issue of digital financial inclusion as a means to overcome the traditional hurdles in access to financial services and its impact on the level of financial development. Using a broad sample of 102 countries worldwide and a time series of data ranging from 2011 to 2021, a Principal Component Analysis is applied to derive a single measure of digital financial inclusion (DFI). The ranking shows that the developed countries and the European nations in general dominate the list, while the bottom is mostly populated by African countries. Using a modified digital financial inclusion index to meet the availability of data, a regression analysis using OLS and GMM techniques was applied to determine the impact of DFI on the level of financial development. The results show that digital financial inclusion has a positive impact on financial development, so the authorities should closely monitor and support the use of digital technologies in the financial sector, as well as enhance the access of the population to these opportunities and their ability to use modern communication technologies.

Suggested Citation

  • Sasho Arsov & Aleksandar Naumoski & Pece Nedanovski, 2025. "Digital Financial Inclusion And The Level Of Financial Development," Proceedings of the 5th International Conference "Economic and Business Trends Shaping the Future" 2024 005, Faculty of Economics-Skopje, Ss Cyril and Methodius University in Skopje.
    • Handle: RePEc:aoh:conpro:2025:i:6:p:91-101
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    JEL classification:

    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • G50 - Financial Economics - - Household Finance - - - General

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