Index of Financial Inclusion – A measure of financial sector inclusiveness

Miranda Sarma

No 1207, Competence Centre on Money, Trade, Finance and Development from Hochschule fuer Technik und Wirtschaft, Berlin

Abstract: The promotion of an inclusive financial system is a policy priority in many countries. While the importance of financial inclusion is widely recognized, the literature lacks a comprehensive measure that can be used to measure the extent of financial inclusion across economies. This paper attempts to fill this gap by proposing an index of financial inclusion (IFI). The proposed IFI captures information on various dimensions of financial inclusion in a single number lying between 0 and 1, where 0 denotes complete financial exclusion and 1 indicates complete financial inclusion in an economy. The proposed index is easy to compute and is comparable across countries and over time. It also satisfies some important mathematical properties.

Keywords: working paper; daadpartnership; finance-and-trade (search for similar items in EconPapers)
Pages: 34 pages
Date: 2012-07
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (40)

Published in Berlin Working Papers on Money, Finance, Trade and Development, July 2012

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Persistent link: https://EconPapers.repec.org/RePEc:mtf:wpaper:1207

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