Digitalization and Financial Inclusion: New Opportunities and Challenges in Developing Countries

It has become a critical strategy in terms of increasing financial inclusion in developing countries, combating poverty, reducing economic development and income inequality (Demirgüç-Kunt et al., 2018). In this context, Digital Financial Services (DFH) supports inclusiveness by providing a strong alternative for individuals who do not have access to traditional banking systems (Ozili, 2018). Digital vehicles such as mobile banking, digital wallets, credit services over the internet and fintech applications facilitate the integration of individuals living in low -income and rural areas into the financial system (GSMA, 2021). In this study, the impact of digital financial services on financial inclusion in developing countries was examined by literature screening method. The studies discussed; It shows that factors such as the development of digital infrastructure, regulatory frames, digital literacy level and gender inequality significantly affect the inclusion levels (Sahay et al., 2020). Furthermore, it has been found that the spread of digital financial instruments provides economic benefits at micro and macro level (Lukogga, 2020). This article argues that digital financial transformation should be considered as an inclusive development model in developing countries and provides strategic suggestions for policy makers.