The Impact of Digital Literacy and Technology Adoption on Financial Inclusion: Evidence from Emerging Economies in Africa, Asia, and Latin America

Abstract

This paper explores the impact of digital literacy and new technology adoption on financial inclusion in emerging markets. It examines the joint effect of digital maturity and blockchain adoption on access to secure, transparent, and efficient financial services in Africa, Asia, and Latin America. Using a two-step system GMM model, we analyze data from 56 emerging countries (2011-2021) and find robust empirical evidence on the significant impact of digital infrastructure, digital financial maturity, and new technology adoption on financial inclusion. Results vary by region: digital literacy positively impacts financial inclusion in Africa but negatively in Asia, while new technology adoption promotes financial inclusion in both Asia and Latin America. Additionally, internet penetration boosts financial inclusion in Latin America but negatively affects it in Asia. Government intervention negatively impacts financial inclusion in Africa but promotes it in Asia.

Keywords: Financial inclusion, Artificial intelligence, Blockchain, digital literacy, Emerging countries