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Khan, Muhammad Ayub Mehar
Year of Publication: 
Series/Report no.: 
ADBI Working Paper No. 1294
Asian Development Bank Institute (ADBI), Tokyo
This study examines the role and effectiveness of the several modes of financial inclusion and technology for uninterrupted economic and business activities during the COVID-19 pandemic. The study is based on empirical analysis through statistical estimation of four mathematical equations. The Cross-sectional Random-Effects Model in panel least squares (PLS) technique based on four years' data on 102 countries was applied to identify the determinants of GDP growth, shareholders' wealth, and trade in goods and services. The impacts of the use of credit cards, use of the internet for shopping and payment of utility bills, and electronic transfer of funds on GDP growth, trade in goods and services, and shareholders' wealth have been tested. It is envisaged that COVID-19 has adversely affected GDP growth, but the use of financial technology for buying goods and services, and receiving money through digital modes during the pandemic crisis, may set off economic losses to some extent. The empirical evidences show that a higher share of the population receiving payments by digital modes and use of the internet for paying bills or buying something online are significant and robust determinants of trade in goods and services. Similarly, the use of the internet for buying things and for paying utility bills is a significant positive determinant of GDP growth. The results have also been estimated for 35 Asian countries separately and it was found that the COVID-19 pandemic and the use of fintech have affected these Asian countries in a similar way. These conclusions support the promotion of e-money and digital transactions in the economy. Although the role of the provision of domestic credit to the private sector is not significant in the determination of trade in services, it is a highly significant determinant of the value of investors' wealth and merchandizing trade. The positive association of trade in services with the magnitude of merchandizing trade indicates that policymakers must consider the interconnectivity of these two types of trade. Another important finding of this study from the policy formulation point of view is the significant role of financial technology in GDP growth. A significant association between GDP growth and the number of deaths due to COVID-19 was also observed.
digital payments
payments through the internet
debit/credit card
market capitalization
trade in services
panel least squares
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Working Paper

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