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Triggers and Barriers for ‘Exclusion’ To ‘Inclusion’ in the Financial Sector: A Country-Wise Scrutiny

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Listed:
  • Keshav Sood

    (Assistant Professor, Madras School of Economics)

  • Shrabani Mukherjee

    (Assistant Professor, Madras School of Economics)

Abstract

There have been very few works focusing on the determinants and barriers of financial inclusion. The objective of this study is two folded. Firstly, to measure a efficient composite multi-dimensional index for financial inclusion with both supply and demand-side factors using two stage Principal Component Analysis for 91 countries using the World Bank Findex database for two benchmark years, 2011 and 2014. Secondly, to track the binding determinants of financial inclusion using a panel fixed effects model. The middle and low income countries can reach up to their potential if sources of barriers have been tracked efficiently as this is the main constraint for inclusive financial system.

Suggested Citation

  • Keshav Sood & Shrabani Mukherjee, 2016. "Triggers and Barriers for ‘Exclusion’ To ‘Inclusion’ in the Financial Sector: A Country-Wise Scrutiny," Working Papers 2016-154, Madras School of Economics,Chennai,India.
    • Handle: RePEc:mad:wpaper:2016-154
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    References listed on IDEAS

    as
    1. Allen, Franklin & Demirguc-Kunt, Asli & Klapper, Leora & Martinez Peria, Maria Soledad, 2016. "The foundations of financial inclusion: Understanding ownership and use of formal accounts," Journal of Financial Intermediation, Elsevier, vol. 27(C), pages 1-30.
    2. Rashmi Umesh Arora, 2010. "Measuring Financial Access," Discussion Papers in Economics economics:201007, Griffith University, Department of Accounting, Finance and Economics.
    3. Beck, Thorsten & Demirguc-Kunt, Asli & Martinez Peria, Maria Soledad, 2007. "Reaching out: Access to and use of banking services across countries," Journal of Financial Economics, Elsevier, vol. 85(1), pages 234-266, July.
    4. Chakravarty, Satya R. & Pal, Rupayan, 2013. "Financial inclusion in India: An axiomatic approach," Journal of Policy Modeling, Elsevier, vol. 35(5), pages 813-837.
    5. 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.
    6. Mishra, SK, 2007. "A Comparative Study of Various Inclusive Indices and the Index Constructed by the Principal Components Analysis," MPRA Paper 3377, University Library of Munich, Germany.
    7. Asli Demirguc-Kunt & Leora Klapper, 2013. "Measuring Financial Inclusion: Explaining Variation in Use of Financial Services across and within Countries," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 44(1 (Spring), pages 279-340.
    8. Noelia Cámara & David Tuesta, 2018. "Measuring financial inclusion: a multidimensional index," IFC Bulletins chapters, in: Bank for International Settlements (ed.), The role of data in supporting financial inclusion policy, volume 47, Bank for International Settlements.
    9. Asli Demirguc-Kunt & Leora Klapper, 2013. "Measuring Financial Inclusion: Explaining Variation in Use of Financial Services across and within Countries," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 46(1 (Spring), pages 279-340.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Financial Inclusion; multidimensional; Principal Component Analysis; Fixed effects model;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • C38 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Classification Methdos; Cluster Analysis; Principal Components; Factor Analysis

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