Academic Finance (Apr 2024)
Impact of COVID-19 on Financial Inclusion in Developing Countries
Abstract
Purpose: The paper studied and analyzed the impact of COVID-19 on digital financial inclusion in developing countries focusing on Sudan during 2018-2021. Method: It is based on the analytical descriptive approach and hypothesizes that COVID-19 was a positive catalyst for developing and promoting digital financial services in developing countries. Data were collected from the WHO, WB, IMF, and the CBOS databases. Results: Although the COVID-19 pandemic affected negatively the economies of developing countries, it helped increase demand for digital financial services and promoted financial inclusion. The study recommends policymakers and regulators in developing countries activate partnerships between banks and telecom companies leading to removing the barriers to financial inclusion (weakness of infrastructure for digital operation, high operation cost, rigidity in KYC procedures concerning opening new bank accounts, and fear of dealing with modern Fintech). Originality/relevance: The paper highlighted the financial services situation in developing countries and the importance of developing and benefiting from financial technology to enhance digital financial inclusion, especially in the wake of the COVID-19 pandemic.
