Measuring Financial Inclusion: A Multidimensional Index
BBVA Research
Download Document| Date Published | 2014 |
| Version | |
| Primary Author | Noelia Cámara and David Tuesta |
| Other Authors | |
| Theme | Financial Inclusion |
| Country |
Abstract
We rely on demand and supply-side information to measure the extent of financial inclusion at country level for eighty-two developed and less-developed countries. We postulate that the degree of financial inclusion is determined by three dimensions: usage, barriers and access to financial inclusion. Weights assigned to the dimensions are determined endogenously by employing a two-stage Principal Component Analysis. Our composite index offers a comprehensive measure of the degree of financial inclusion,easy to understand and compute.