Financial Inclusion and Financial Literacy Dimensions in Developing Economies : Cross-Country Evidence

초록

This study examines the relationship between financial inclusion, digital financial development, and financial capability across countries. Financial capability is measured through three dimensions of financial literacy: financial knowledge, financial behavior, and financial attitude. The analysis uses financial literacy data from OECD/INFE surveys conducted in 2016, 2020, and 2023, along with a financial inclusion index built from World Bank Global Findex data, which was created using principal component analysis. The findings indicate that financial inclusion is closely and positively linked to financial behavior and financial attitude, but it has a weak and negative connection with financial knowledge. There is no strong link between the use of digital payments and any aspect of financial literacy. Financial knowledge is more closely linked to economic development, digital connectivity, and the depth of the financial system. These results show that even though more people have access to financial services, there isn't a corresponding increase in their ability to understand and manage money effectively, which aligns with the OECD's concept of the Digital Financial Paradox. The findings indicate that policies focused on enhancing financial skills, especially in developing economies, should go hand in hand with efforts to expand financial access, supported by ongoing commitments to education, reliable information, and strong institutional growth.

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