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The impact of digital financial services on financial inclusion: a panel data regression method

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Ocharive, Aruoriwo and Iworiso, Jonathan (2024) The impact of digital financial services on financial inclusion: a panel data regression method. International Journal of Data Science and Analysis, 10 (2). pp. 20-32. ISSN 2575-1883

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Abstract

This paper delves into the intricate relationship between digital financial services (DFS), traditional payment methods (TPM),
economic factors, and demographic variables in a quest to enhance financial inclusion. Panel data regression models were employed to analyse the data encompassing credit card access, borrowing, mobile money accounts, electronic payments, and economic and demographic factors. The findings underscore the pivotal role of digital financial services in promoting financial inclusion, particularly mobile money accounts and electronic payments. These services offer cost-effective and efficient alternatives to traditional banking, facilitating greater economic participation. Furthermore, the study reveals the influence of conventional payment methods, with suggestive continuing relevance on a long run. Economic and demographic factors such as age, income, education, and gender emerge as crucial determinants of financial inclusion, emphasising the need for tailored strategies in diverse population segments. Overall, the results are promising with demonstrable statistically significant evidence in the approach to financial inclusion, leveraging digital innovations while addressing various economic factors and demographic groups' needs. The approach seems to guarantee a more equitable, accessible and efficient global financial system to foster economic growth and societal well-being. Thus, the output in this paper will be economically useful to financial institutions, modern digital technology companies and further researchers who aimed to continuously adapt and improve the approach to financial inclusion.

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