This systematic review explores the critical role of digital literacy in fostering economic participation and reducing the digital divide in developing economies, focusing on research published from 2015 onward. Using the PRISMA framework, 35 studies were reviewed to uncover persistent challenges, innovative solutions, and transformative opportunities for enhancing digital inclusion. The findings reveal that infrastructure deficits, socioeconomic disparities, and gender-based inequalities significantly hinder digital participation. However, the evidence highlights that targeted interventions, public-private partnerships, and context-specific policies can effectively bridge these gaps. This review provides actionable insights for policymakers, educators, and stakeholders seeking to harness the digital economy for inclusive growth.