Boosting financial inclusion is one of the main motivations for issuing retail central bank digital currencies (CBDCs) among developing economies. In this paper, we develop a model incorporating the impact of financial inclusion to study the implications of introducing CBDC. One of the most frequently raised concerns regarding CBDC issuance is the disintermediation of banks and impact on the overall supply of credit. However, CBDCs in developing economies (unlike in advanced economies) have the potential to bank large unbanked populations and boost financial inclusion which can increase overall lending and reduce bank disintermediation risks. Our model captures two key channels. First, CBDC issuance can increase bank deposits from the previously unbanked by incentivizing the opening of bank accounts for access to CBDC wallets (offsetting potential flows from deposits to CBDCs among those already banked). Second, CBDC usage allows for the building of credit to reduce credit-risk information asymmetry in lending. We find that CBDC increases aggregate household welfare and overall lending if (1) the size and relative wealth of the previously unbanked population is large, (2) CBDC is valuable as a means of payment, (3) CBDC usage allows banks to distinguish between consumers with large differences in credit risk, and (4) bank deposit liquidity risk is low. CBDC can still be optimal for household welfare when overall lending decreases if the value of CBDC as a means of payment is high. Most countries are considering a "two-tier" CBDC model, where central banks issue CBDC to commercial banks which in turn distribute them to consumers. Under an alternative "two-tier" model where non-bank payment system providers (PSPs) can distribute CBDC, fewer funds will flow into deposit accounts from the unbanked because a bank account is no longer needed to access CBDC. If CBDC data is shareable with commercial banks, those without bank accounts can still build credit and access lower interest rate loans. This design is optimal for household welfare if the gains from greater access to CBDC outweigh the contraction in lending.