Measuring Financial Inclusion: A Multidimensional Index

Noelia Camara and David Tuesta

No 1426, Working Papers from BBVA Bank, Economic Research Department

Abstract: We rely on demand and supply-side information to measure the extent of financial inclusion at country level for eighty-two developed and less-developed countries. We postulate that the degree of financial inclusion is determined by three dimensions: usage, barriers and access to financial inclusion. Weights assigned to the dimensions are determined endogenously by employing a two-stage Principal Component Analysis. Our composite index offers a comprehensive measure of the degree of financial inclusion, easy to understand and compute.

Keywords: financial inclusion; Principal Component Analysis; inclusion barriers (search for similar items in EconPapers)
JEL-codes: C43 G21 O16 (search for similar items in EconPapers)
Pages: 35 pages
Date: 2014-09
New Economics Papers: this item is included in nep-ban
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Citations: View citations in EconPapers (107)

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Chapter: Measuring financial inclusion: a multidimensional index (2018)
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