THE ROLE OF FINTECH AND FINANCIAL INCLUSION IN THE ECONOMIC DEVELOPMENT OF COUNTRIES: A COMPARATIVE ANALYSIS

The integration of digital financial technology has revolutionized the global financial system, driving financial inclusion as an important pillar of sustainable economic development. This study examines the multidimensional effects of Digital Financial Technology and Financial Inclusion on Economic Development in middle- and high- income countries. The study employs various indicators of financial inclusion and technology, namely access to the internet, Automated Teller Machines (ATMs), bank branches, and the number of depositors examined using panel regression analysis covering 20 middle-income countries and 22 high-income countries from 2010 to 2021. The regression analysis results show that ATMs, internet access, bank branches, and the number of depositors all have a positive correlation with the Index of Human Development, which was used to measure economic development. This supports the idea that wider use of technology and increased financial inclusion can lead to higher levels of human development. Conversely, the study highlights a negative correlation between inflation rates (as a control variable) and Human Development Index (HDI) emphasizing the significance of maintaining price stability for sustained economic progress. The study concludes that digital financial technology and financial inclusion positively impact the economic development of countries and the disparity between middle- and high-income countries. So, the middle-income countries should prioritize the development of financial technology and policies to promote financial inclusion.