The Role of Availability of Financial Institutions and Financial Innovation on the Financial Inclusion: Does Digital Finance Moderate this Linkage?

In recent years, financial inclusion has been the most critical factor for effective economic growth (EG), which could be attained through the availability of financial institutions and financial innovation. Due to its increased significance, this study investigates the effect of the availability of financial institutions, digital finance, and financial innovation on financial inclusion in ASEAN nations. In addition, this study investigates the moderating effect of digital finance on the availability of financial institutions, financial innovation, and financial inclusion in ASEAN nations. Population and economic growth were also used as control variables in the study. From 2007 to 2021, the researchers utilized secondary data extracted from the World Development Indicators (WDI) database. The researchers also employed the cross-sectional augmented distributed latency (CS-ARDL) method to examine the relationship between the variables. Financial inclusion was positively correlated with the availability of financial institutions, digital finance, population growth, and financial innovation. In addition, digital finance moderates the relationship between the availability of financial institutions, financial innovation, and financial inclusion substantially. The research guides regulators in developing regulations to enhance financial inclusion through digital finance, financial innovation, and financial institutions.