Title:
Role of Digital Financial Inclusion on Economic Growth: Evidence from South Asian Countries

Authors:
Faisal Ahmed Mashrur, USA

Abstract:

This study examines the role of digital financial inclusion (DFI) in fostering economic growth across three South Asian countries: Bangladesh, Pakistan, and Nepal. Utilizing data from the World Bank and the IMF, the Generalized Method of Moments (GMM) has been employed to analyze the impact of DFI on GDP growth. The findings demonstrate that a one-unit increase in the Digital Financial Inclusion Index causes a 48.32-unit increase in GDP per capita, demonstrating digital financial services' crucial role in enhancing economic productivity. The study also considers the influence of several economic variables, including foreign direct investment, trade, inflation, and government expenditure, to provide a comprehensive view of the factors contributing to economic growth. The results highlight the transformative potential of digital financial services in increasing economic participation and suggest that strategic investments in digital infrastructure and supportive regulatory frameworks are critical for maximizing these benefits. This research contributes to the understanding of how digital financial services can act as catalysts for economic development in emerging markets, offering insights for policymakers and stakeholders aiming to harness the benefits of financial technology.

DOI: https://doi.org/10.51505/IJEBMR.2024.81207