THE ROLE OF DIGITAL FINANCIAL INCLUSION IN PROMOTING ECONOMIC GROWTH IN NEPAL

Abstract

This study explores the impact of digital financial inclusion on economic growth in Nepal, focusing on the role of digital financial services such as mobile banking, ATMs, branchless banking, and internet banking in fostering financial inclusion and GDP growth. Utilizing secondary data from fiscal years 2013/14 to 2022/23, the study employs descriptive and causal research designs, incorporating trend analysis and correlation analysis. Findings reveal strong positive correlations between GDP and key variables like the number of bank branches, ATMs, mobile banking users, deposit accounts, debit card holders, and branchless banking services. The study concludes that digital financial services have a transformative effect on financial inclusion, providing previously underserved populations with access to essential financial services. The study provides policy recommendations urging policymakers and financial institutions to invest in both digital and physical banking infrastructure, especially in remote areas, while emphasizing the need for enhanced financial literacy programs to improve service adoption. The research contributes valuable insights for future studies on the long-term effects of digital financial inclusion on economic performance.