Examining the relationship between digital finance and financial inclusion : evidence from MENA countries

Although financial inclusion (FI) has attracted growing attention from academics and policy makers, the effect of digital finance (DF) on FI has not been studied sufficiently. Therefore, this study examines the association between DF and FI in the Middle East and North Africa (MENA) region. FI is measured with a composite index incorporating three subindexes: access, availability, and usage of financial services; DF is measured by the number of ATMs per 100,000 adults. A system-generalized method of moments (sys-GMM) panel method is employed with annual data on 12 countries in the MENA region over the period 2004–2020. Additionally, five control variables are used in the study. The results confirm the role of DF in enhancing FI in the MENA countries. Policy makers and digital financial service providers in MENA countries can use the study's findings to expand the boundaries of FI in their countries.