The Financial Inclusion Index is a way to figure out how many people in a country or area have access to money. Financial inclusion is the degree to which people and companies have access to and can make good use of financial services like banking, credit, insurance, and investment possibilities.
Usually, the index is made up of different factors that measure different parts of financial participation. Some of these signs could be:
1.Access to banking services: This shows how many people and companies have access to official banking services like bank accounts, savings accounts, and payment services.
2.Usage of banking services: This looks at how often people and companies use banking services, like making payments, withdrawals, and digital transactions.
3.Availability of credit: This factor measures how easy it is for people and companies to get loans and credit cards and other forms of credit.
4.Insurance coverage: This looks at how easy it is for people and companies to get insurance goods like health insurance, life insurance, and property insurance.
5.Financial literacy: This indicator measures how much people know and understand about financial goods and services and how well they can use that information to make smart financial choices.
6.Digital financial services: This includes the use of mobile banking, online payments, and digital accounts, among other things.
By looking at these markers, policymakers, academics, and financial institutions can figure out how financially included a certain area is and find places that need to be improved. The Financial Inclusion Index gives a standard way to compare financial inclusion in different countries or regions and track growth over time.
It’s important to note that different groups and studies may use different methods and indicators to figure out the Financial Inclusion Index. Different groups, such as central banks, foreign organizations, and study schools, may have their own versions of the index.