Abstract
Modern regional economic analysis frequently emphasizes digital financial inclusion (DFI) as a driver of growth, yet empirical evidence regarding its impact on Kazakhstan’s small and medium-sized enterprises (SMEs) remains sparse. To address this gap, we constructed a balanced panel dataset encompassing 17 Kazakhstani regions over the 2020–2024 period. DFI was measured using a composite index incorporating POS terminal coverage, cashless transaction volumes, and internet penetration rates. Applying principal component analysis alongside fixed- and random-effects panel regressions, we observed a robust association between digital financial development and SME output. Specifically, the DFI Index demonstrated a high linear correlation with SME gross value added, with random-effects estimations confirming a statistically significant positive coefficient alongside gross regional product. Robustness tests reinforced these baseline findings: excluding the atypical pandemic year of 2020 amplified the magnitude of the DFI effect, while a lagged specification maintained similar statistical strength, reducing concerns about reverse causality. Crucially, the spatial distribution of digital finance revealed substantial territorial inequality, predominantly concentrated in Almaty and Astana. Consequently, policies targeting regional digital infrastructure disparities offer a tangible pathway to sustain SME expansion and support balanced long-term growth across Kazakhstan.