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Digital Financial Inclusion in Emerging and Developing Economies: A New Index

Purva Khera, Stephanie Ng, Sumiko Ogawa and Ratna Sahay

No 2021/090, IMF Working Papers from International Monetary Fund

Abstract: Adoption of technology in the financial services industry (i.e. fintech) has been accelerating in recent years. To systematically and comprehensively assess the extent and progress over time in financial inclusion enabled by technology, we develop a novel digital financial inclusion index. This index is based on payments data covering 52 developing countries for 2014 and 2017, taking into account both access and usage dimentions of digital financial services (DFSs). This index is then combined with the traditional measures of financial inclusion in the literature and aggregated into an overall index of financial inlusion. There are two key findings: first, the adoption of fintech has been a key driver of financial inclusion. Second, there is wide variation across countries and regions, with the greatest progress recorded in Africa and Asia and the Pacific regions. This index should offer a useful analytical tool for researchers and policy makers.

Keywords: Fintech; digital financial services; financial inclusion; financial services industry; adoption of technology; capital markets department; services play; account ownership; Mobile banking; Caribbean; Asia and Pacific; Global; Africa (search for similar items in EconPapers)
Pages: 33
Date: 2021-03-19
New Economics Papers: this item is included in nep-cwa, nep-dev, nep-fdg, nep-fle and nep-pay
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Handle: RePEc:imf:imfwpa:2021/090