Assessing Countries’ Financial Inclusion Standing: A New Composite Index

By Goran Amidžić, Alexander Massara, André Mialou. Social Science Research Network, 2014

328 citations recorded by the source corpus.

This paper leverages the IMF’s Financial Access Survey (FAS) database to construct a new composite index of financial inclusion. The topic of financial inclusion has gathered significant attention in recent years. Various initiatives have been undertaken by central banks both in advanced and developing countries to promote financial inclusion. The issue has also attracted increasing interest from the international community with the G-20, IMF, and World Bank Group assuming an active role in developing and collecting financial inclusion data and promoting best practices to improve financial inclusion. There is general recognition among policy makers that financial inclusion plays a significant role in sustaining employment, economic growth, and financial stability. Nonetheless, the issue of its robust measurement is still outstanding. The new composite index uses factor analysis to derive a weighting methodology whose absence has been the most persistent of the criticisms of previous indices. Countries are then ranked based on the new composite index, providing an additional analytical tool which could be used for surveillance and policy purposes on a regular basis.

Subfields: Accounting, Economics and Econometrics, Information Systems

View Paper: https://www.semanticscholar.org/paper/1eec095088232de48f0137fd813925e4506db45e

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In Accounting

1. T. Nguyen
2. Cyn‐Young Park
3. A. Posso
4. Quanda Zhang
5. Rogelio V. Mercado
6. M. Omar
7. K. Inaba
8. V. Marisetty

In Economics and Econometrics

1. T. Nguyen
2. Cyn‐Young Park
3. A. Posso
4. Quanda Zhang
5. Rogelio V. Mercado
6. M. Omar
7. K. Inaba
8. V. Marisetty

In Information Systems

1. T. Nguyen
2. Cyn‐Young Park
3. Rogelio V. Mercado
4. M. Omar
5. K. Inaba

Citations in the corpus

• Financial Inclusion, Poverty, and Income Inequality in Developing Asia (2015, background): “Burgess and Pande (2005) found that state-led expansion of rural bank branches in India has helped reduce poverty.”
• Measuring financial inclusion: a composite FI index for the developing countries (2020, methodology): “Therefore, the contribution of Amid zi c et al. (2014) in providing an index using Factor Analysis (FA) or Principal Component Analysis method (PCA) of Camara and Tuesta (2014) to determine the appropriate weights for calculating the FI index is an attempt to overcome the previous criticism, less…”
• Thinking Inside the Box: A Closer Look at Financial Inclusion and Household Income (2019, background): “Macroeconomic studies traditionally incorporate savings into financial inclusion indicators with measures such as deposit per 1000 adults (Massara & Mialou, 2014).”
• Financial Inclusion, Financial Literacy and Economically Vulnerable Populations in the Middle East and North Africa (2019, unknown): “…of market failures such as discrimination, lack of information, shortcomings in contract enforcement, poor information environment, or price barriers (e.g., Amidžić, Massara, and Mialou 2014; Beck, Demirgüç-Kunt, and Honohan 2009; Demirgüç-Kunt, Beck, and Honohan 2008; The World Bank 2014a).”