Determinants of digital financial inclusion in Latin America and the Caribbean

Purpose: This study investigates the determinants of digital financial inclusion (DFI) in Latin America and the Caribbean (LAC), focusing on the influence of sociodemographic factors on the accessibility and use of digital financial services. The analysis is based on the World Bank’s Global Financial Inclusion Database from 2021. Design/methodology/approach: An index variable was created by grouping all questions related to the accessibility and use of digital financial services into a single measure, which draws on information from the Global Findex Survey covering 15 countries from LAC. In addition, a probit model was employed to assess the demographic determinants of DFI. Findings: The findings indicate that sociodemographic factors such as age, education, gender, income, employment status and country of origin significantly influence DFI. Research limitations/implications: The study primarily examines sociodemographic factors, potentially overlooking other crucial determinants, including infrastructure, regulatory frameworks and cultural influences that are likely to play significant roles. Practical implications: Policymakers should develop inclusive policies to address barriers such as digital literacy and internet access while enhancing fintech innovation and infrastructure in countries with lower adoption rates, thereby promoting broader financial inclusion across the region. Social implications: The findings offer valuable insights for policymakers and service providers in LAC to enhance DFI, especially among marginalized population groups, namely women or people with lower income and education levels. Originality/value: This study contributes original insights into the understanding of DFI in LAC by highlighting the influence of sociodemographic factors within the context of a rapidly evolving digital landscape.