Understanding the link between government cashless policy, digital financial services and socio-demographic characteristics in the MENA countries

Purpose To help inform the debate over whether socio-demographic characteristics are related to the use of digital technologies, the authors investigated the effects of age, gender, education, income and being in the workforce on changes in using financial digital services using panel data collected in the MENA countries during 2017. Design/methodology/approach This study aims to identify the impact of government policy on the determinants of financial inclusion and digital payment services in the MENA region. The authors use microdata from the 2017 Global Findex database on MENA countries to perform probit estimations. The paper focuses on the role of technology adoption by government authorities in extending financial inclusion and digital payment around different people. Findings The authors find that poorer people (and, by association, less educated people) and the young (but less so the elderly) are disproportionately excluded from the financial system. Results confirm that better collaboration between the government and the financial sector can help to develop digital financial inclusion through the technology adoption channels. The study confirms the significant impact of the government cashless policy in advancing financial inclusion in the MENA countries, with potentially wider applicability to other developed economies. Practical implications Policies to advance mobile money innovations could stimulate financial inclusion by promoting digital transaction services. The role of government authorities is imperative to harness the beneficial and sustainable gains from digitizing remittances and transfers to promote a cashless economy. Originality/value Financial inclusion promotes equality through a broadening of the system and government cashless policy can be a major catalyst for greater financial inclusion. It helps in the overall economic development of the underprivileged population and contributes to poverty reduction.