Evaluating the moderating role of governance on the relationships between social inclusion, ICT infrastructure, and financial inclusion.

In this paper, we examine the Moderating Role of Governance on the Relationships between social inclusion (SI), Information and communication technology infrastructure (ICT), and financial inclusion (FI) in 46 countries representing a global sample span from 2010 to 2020. We collect the data from the IMF's financial access survey and construct a multidimensional FI index. Based on the FI index, we divide the sample into two sub-samples (med-high level and low-level FI countries). For the empirics, we employed panel-corrected standard errors, fully modified ordinary least squares and dynamic ordinary least squares techniques. We find that SI is negatively related to FI. ICT infrastructure positively influences FI. Further, we find that governance with sound ICT infrastructure and socially inclusive communities enhances FI. The findings of sub-samples are similar to the full sample results except for a promoting effect of SI and governance in the case of med-high financially inclusive economies. Moreover, the Interaction term of governance and ICT infrastructure is insignificant in med-high financially inclusive economies and negatively significant in low financially inclusive economies. Our study reports novel findings which have significant implications for policymakers and financial institutions to effectively develop and implement new policies which strengthen the institutional base, develop digital banking infrastructure, enhance SI to boost up FI and ensure sustainable economic growth.