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Index of Financial Inclusion

Author

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  • Mandira Sarma

    (Indian Council for Research on International Economic Rela)

Abstract

The promotion of an inclusive financial system is considered a policy priority in manycountries. While the importance of financial inclusion is widely recognized, theliterature lacks a comprehensive measure that can be used to measure the extent offinancial inclusion across economies. This paper attempts to fill this gap byproposing an index of financial inclusion (IFI). The IFI is a multi-dimensional indexthat captures information on various dimensions of financial inclusion in one singledigit lying between 0 and 1, where 0 denotes complete financial exclusion and 1indicates complete financial inclusion in an economy. The proposed index is easy tocompute and is comparable across countries.

Suggested Citation

  • Mandira Sarma, "undated". "Index of Financial Inclusion," Indian Council for Research on International Economic Relations, New Delhi Working Papers 215, Indian Council for Research on International Economic Relations, New Delhi, India.
    • Handle: RePEc:ind:icrier:215
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    File URL: http://www.icrier.org/pdf/Working_Paper_215.pdf
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    References listed on IDEAS

    as
    1. Ross Levine, 1997. "Financial Development and Economic Growth: Views and Agenda," Journal of Economic Literature, American Economic Association, vol. 35(2), pages 688-726, June.
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    3. Desai, Meghnad, 1991. "Human development : Concepts and measurement," European Economic Review, Elsevier, vol. 35(2-3), pages 350-357, April.
    4. Sagar, Ambuj D. & Najam, Adil, 1998. "The human development index: a critical review," Ecological Economics, Elsevier, vol. 25(3), pages 249-264, June.
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    More about this item

    Keywords

    inancial inclusion; IFI; multi-dimensional index; normalized inverse; Euclidean distance;
    All these keywords.

    JEL classification:

    • G00 - Financial Economics - - General - - - General
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance

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