Measuring Financial Inclusion: A Multidimensional Index

BBVA Research

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Date Published 2014
Primary Author Noelia Cámara and David Tuesta
Other Authors
Theme Financial Inclusion


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.

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