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Financial Inclusion Index at District Levels in Bangladesh: A Distance-based Approach

Author

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  • Hasan, Md Rashel
  • Islam, Md Ezazul

Abstract

This paper computes an index of financial inclusion (IFI) of Bangladesh at the district levels by using a distance based approach and incorporating various dimensions of inclusive finance. The IFI indicates that most of the districts of Bangladesh have experienced significant progress in financial inclusion over the period of 2008 to 2014 with the exception of Khagrachhari, Netrokona, Kurigram, and Sunamganj. Furthermore, the financial inclusion map reflects that the process of financial inclusion gets accelerated at the end of 2010, just after the inclusive finance policy initiatives undertaken by Bangladesh Bank. Hence, the index can be used to compare the extent of financial inclusion across districts and to monitor the progress of the financial inclusion over time. The index value reflecting overall financial inclusion of Bangladesh increased to 0.697 in 2014 from 0.503 in 2008. There are policy implications of this finding for making inclusive finance strategies in Bangladesh. The index may guide Bangladesh Bank and the Government to pursue inclusive growth for reducing regional disparities to meet Vision 2021 as well as the Sustainable Development Goals.

Suggested Citation

  • Hasan, Md Rashel & Islam, Md Ezazul, 2016. "Financial Inclusion Index at District Levels in Bangladesh: A Distance-based Approach," MPRA Paper 71344, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:71344
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    References listed on IDEAS

    as
    1. Park, Cyn-Young & Mercado, Rogelio, 2015. "Financial Inclusion, Poverty, and Income Inequality in Developing Asia," ADB Economics Working Paper Series 426, Asian Development Bank.
    2. 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.
    3. 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.
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    Cited by:

    1. S M Rakibul ANWAR & Tanzina Tabassum TANZO & Riduanul MOSTAFA, 2017. "Financial Inclusion- A Comparative Study On South Asia," Business Excellence and Management, Faculty of Management, Academy of Economic Studies, Bucharest, Romania, vol. 7(4), pages 18-33, December.

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    More about this item

    Keywords

    Inclusive growth; financial inclusion; financial inclusion index; district; Bangladesh economy;
    All these keywords.

    JEL classification:

    • E50 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - General
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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