Index of Financial Inclusion

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.