The Relationship between Digital Finance and Financial Inclusion with the Moderating Role of Gender Inequality: Evidence from G20 Countries
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digital finance, financial inclusion, G20 countries, gender
Abstract
Digital finance has the potential to expand public access to financial services, but its benefits may be uneven when gender inequality remains high. This study analyzes the relationship between digital finance and financial inclusion by considering the moderating role of gender inequality in 13 G20 member countries during 2004-2022. Financial inclusion is measured using the Financial Inclusion Index (IFI) and gender inequality is measured using the Gender Inequality Index. Digital finance is proxied by the number of ATMs per 100,000 adults. This proxy primarily represents technology-based financial access infrastructure, rather than the entire digital finance ecosystem. This study contributes to the literature by examining the role of gender inequality as a moderating variable in the relationship between digital finance and financial inclusion in the cross-country context of G20 economies. The estimation is conducted using a static panel data model with the Random Effects Model approach. Panel estimates show that digital finance is positively associated with financial inclusion, while gender inequality is negatively related. The interaction coefficient between digital finance and gender inequality is negative and significant, indicating that the positive association of digital finance on financial inclusion is stronger in countries with lower gender inequality. These findings highlight the importance of digital financial policies accompanied by strategies to reduce gender gaps so that the benefits of digital finance become more inclusive.
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