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Measuring financial inclusion: An Axiomatic approach

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  • Satya R. Chakravarty

    () (Indian Statistical Institute, Kolkata)

  • Rupayan Pal

    () (Indira Gandhi Institute of Development Research)

Abstract

This paper clearly demonstrates that the axiomatic measurement approach developed in the human development literature can be usefully applied to the measurement of financial inclusion. A conceptual framework for aggregating data on financial services in different dimensions is developed. The suggested index of financial inclusion allows calculation of percentage contributions of different dimensions to the overall achievement. This in turn enables us to identify the dimensions of inclusion that are more/less susceptible to overall inclusion and hence to isolate the dimensions that deserve attention from a policy perspective. The paper also illustrates the index using cross-country and sub-national level data.

Suggested Citation

  • Satya R. Chakravarty & Rupayan Pal, 2010. "Measuring financial inclusion: An Axiomatic approach," Indira Gandhi Institute of Development Research, Mumbai Working Papers 2010-03, Indira Gandhi Institute of Development Research, Mumbai, India.
  • Handle: RePEc:ind:igiwpp:2010-03
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    Citations

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    Cited by:

    1. Noelia Camara & David Tuesta, 2014. "Measuring Financial Inclusion: A Multidimensional Index," Working Papers 1426, BBVA Bank, Economic Research Department.
    2. repec:gam:jsusta:v:10:y:2018:i:4:p:1200-:d:141288 is not listed on IDEAS
    3. Jagjit Chadha & Young-Kwan Kang, 2016. "Finance and Credit in a Model of Monetary Policy," National Institute of Economic and Social Research (NIESR) Discussion Papers 471, National Institute of Economic and Social Research.
    4. Tapsoba, Sampawende J.-A., 2014. "Options and strategies for fiscal consolidation in India," Economic Modelling, Elsevier, vol. 43(C), pages 225-237.
    5. Akin, Tarik & Iqbal, Zamir & Mirakhor, Abbas, 2016. "The composite risk-sharing finance index: Implications for Islamic finance," Review of Financial Economics, Elsevier, vol. 31(C), pages 18-25.
    6. Zarina Abd Rahman, 2015. "Financial inclusion in Malaysia: tracking progress using index," IFC Bulletins chapters,in: Bank for International Settlements (ed.), Proceedings of the Workshop on "Financial Inclusion Indicators", co-hosted by the Bank Negara Malaysia, Sasana Kijang, Kuala Lumpur, 5-6 November 2012, volume 38 Bank for International Settlements.
    7. repec:ine:journl:v:44:y:2017:i:53:p:121-129 is not listed on IDEAS
    8. Goran Amidžić & Alexander Massara & André Mialou, 2014. "Assessing Countries’ Financial Inclusion Standing - A New Composite Index," IMF Working Papers 14/36, International Monetary Fund.
    9. repec:bis:bisifc:47-18 is not listed on IDEAS
    10. repec:taf:oaefxx:v:4:y:2016:i:1:p:1127011 is not listed on IDEAS
    11. repec:spr:fininn:v:4:y:2018:i:1:d:10.1186_s40854-018-0089-x is not listed on IDEAS
    12. 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.
    13. Recep YORULMAZ, 2013. "Construction of a Regional Financial Inclusion Index in Turkey," Journal of BRSA Banking and Financial Markets, Banking Regulation and Supervision Agency, vol. 7(1), pages 79-101.
    14. Irving Fisher Committee, 2015. "Proceedings of the Workshop on "Financial Inclusion Indicators", co-hosted by the Bank Negara Malaysia, Sasana Kijang, Kuala Lumpur, 5-6 November 2012," IFC Bulletins, Bank for International Settlements, number 38, 01-2016.

    More about this item

    Keywords

    Financial inclusion; axioms; index; policy; application;

    JEL classification:

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

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