This study examines how the adoption of digital finance influences sustainable development through the green transformation of Middle East and North Africa (MENA) Region. This study used panel data of 4 countries from North Africa (Tunisia, Morocco, Algeria, and Egypt) and 9 countries from the Middle East (Iraq, Iran, Lebanon, Yemen, Saudi Arabia, the United Arab Emirates, Kuwait, Jordan, and Bahrain) selected from the World Bank, regional sustainability indicators, and central bank reports between 2019 and 2023. The mediating effects were tested using the multiple regression technique and the two-way fixed effects approach of Preacher and Hayes (2004, 2008) to assess both the direct and mediating effects. This study examines the complex relationships between digital finance (cards, digital payments, and the internet) and sustainable development in the MENA region. In addition, green transformation plays a mediating role in the relationship between digital finance adoption and sustainable development. The results show that digital finance exerts a substantial influence on sustainable outcomes, partially mediated by green transformation, underscoring the imperative to integrate technological and environmental dimensions in development strategies. Our analysis demonstrates that digital payments and internet access significantly enhance sustainability, through both direct effects and indirect mediation via green transformation. This complementary mediation highlights the dual role of financial technologies in delivering immediate operational benefits while simultaneously fostering structural transitions toward sustainability. In contrast, card payments exhibit a negative impact on sustainability by impeding green transformation, especially in emerging economies. The findings have practical implications for managers, regulators, decision-makers, and investors interested in the effect of digital finance and green transformation on sustainable development. Thus, digital finance and green transformation can be helpful for sustainability. Indeed, this research encourages governments, financial institutions, and economic entities to invest in adopting digital tools or channels to pay and receive money and green transformation to improve the sustainable development of countries in the MENA region. These entities should consider using digital channels to achieve a green, low-carbon environment. The present work contributes to the existing literature by highlighting the mediating role of green transformation in the relationship between digital finance and sustainable development in the country of MENA Region.
