Digital financial inclusion as a factor of socio-economic development

Zherdetska Liliia
D.Sc. (Economics), Associate Professor, Head of the Banking Department, Odesa National Economic University, Odesa, E-mail:lzherdetska@gmail.com, ORCID ID: https://orcid.org/0000-0001-5398-868X

Cite this article:

Zherdetska L. (2023) Digital financial inclusion as a factor of socio-economic development. Ed.: V.V. Kovalenko (ed.-in-ch.) and others [Tsyfrova finansova inkliuziia yak chynnyk sotsialno-ekonomichnoho rozvytku; za red.: V.V. Kovalenko (gol. red.)], Scientific Bulletin of the Odesa National Economic University (ISSN 2313-4569), Odesa National Economics University, Odesa, No. 11-12 (312-313), pp. 108-113.

Abstract

Introduction. Digital technologies offer a powerful solution to increasing access to financial services for the approximately two billion adults worldwide who are still excluded from the formal financial system. Introducing innovative business models for banks and further implementation of digital technologies can help connect more people at lower costs (including those living in rural and remote areas) to critical financial services that help them manage their financial live. As a result, it will ultimately offer increased their welfare. This chain allows to determine digital financial inclusion as a significant factor in the socio-economic development of both a separate state and the world economy as a whole. Purpose. Substantiation of the channels and intensity of influence of digital financial inclusion on indicators of socio-economic development. Results. The article presents the results of economic-mathematical modeling of factors of digital financial inclusion, factors of development of the financial sector of the economy on indicators of socio-economic development. Indicators of GDP dynamics per capita and the human development index were substantiated as dependent variables. Indicators of digital and digital financial inclusion defined as independent variables. They are (1) the number of bank branches per 100,000 adults; (2) the number of ATMs per 100,000 adults; (3) account ownership at a financial institution or with a mobile-money-service provider, poorest 40% (% of population ages 15+). Independent variables characterizing the state of financial market development were also added to the model. They are (1) broad money per GDP; (2) domestic credit to the private sector; (3) depth of credit information index; (4) depositors with commercial banks (per 1,000 adults). All considered factors have a positive and statistically significant effect on the human development index. However, economic growth indicators are positively influenced only by the level of financial inclusion, which is explained by indicators of financial infrastructure development (number of bank branches and ATMs per 100,000 adults). Conclusions. Indicators of digital and financial inclusion are important factors of sustainable development and effective functioning of the financial sector of the economy. They have a positive impact on the socio-economic development of the state. At the same time, impact of the digital financial inclusion on economic growth indicators is carried out through the development of the financial market. And the level of development of the financial market is a factor of economic growth.

Keywords

digital financial inclusion, sustainable development, socio-economic development, economic growth.

JEL classification: E440; G210; О160; DOI: https://doi.org/10.32680/2409-9260-2023-11-12-312-313-108-113

UD classification: 336.717.111:330.341.1(477)

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