{
  "title": "Assessing Countries’ Financial Inclusion Standing - A New Composite Index",
  "publication": "IMF Working Papers, February 21, 2014",
  "sourceUrl": "https://www.imf.org/en/publications/wp/issues/2016/12/31/assessing-countries-financial-inclusion-standing-a-new-composite-index-41385",
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  "summary": "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.",
  "sections": [
    {
      "heading": "Overview and purpose",
      "content": "- Paper leverages the IMF’s Financial Access Survey (FAS) database to construct a new composite index of financial inclusion.\n- Motivation:\n  - Financial inclusion has gathered significant attention in recent years.\n  - Various initiatives have been undertaken by central banks both in advanced and developing countries to promote financial inclusion.\n  - The G-20, IMF, and World Bank Group have assumed an active role in developing and collecting financial inclusion data and promoting best practices to improve financial inclusion.\n  - There is general recognition among policy makers that financial inclusion plays a significant role in sustaining employment, economic growth, and financial stability.\n- Problem statement:\n  - The issue of robust measurement of financial inclusion remains outstanding.\n  - Previous indices have been criticized for the absence of an explicit weighting methodology."
    },
    {
      "heading": "Methodology and index construction",
      "content": "- Data source:\n  - IMF’s Financial Access Survey (FAS) database.\n- Index methodology:\n  - The new composite index uses factor analysis to derive a weighting methodology.\n  - Countries are ranked based on the new composite index.\n  - The index provides an additional analytical tool which could be used for surveillance and policy purposes on a regular basis.\n- Technical features and terminology preserved from source:\n  - factor analysis\n  - weighting methodology\n  - composite index value\n  - cross-dimension composite index\n  - geometric mean\n  - normalized variable\n  - scale invariance"
    },
    {
      "heading": "Key findings and analytical contributions",
      "content": "- The paper:\n  - Constructs a new composite index of financial inclusion using FAS data and factor analysis.\n  - Produces country rankings based on the composite index.\n  - Addresses the persistent criticism of prior indices by providing an explicit weighting approach.\n- Analytical utility:\n  - The composite index can be used for surveillance and policy purposes.\n  - The index contributes to the measurement literature on access and usage of financial services, outreach variables, and borrowers variable."
    },
    {
      "heading": "Policy relevance and implications",
      "content": "- Policy relevance emphasized:\n  - Financial inclusion’s role in sustaining employment, economic growth, and financial stability.\n  - Relevance for central banks and policymakers in both advanced and developing countries.\n  - Usefulness for the international community (G-20, IMF, World Bank Group) in monitoring and promoting best practices.\n- Potential applications:\n  - Regular surveillance of countries’ financial inclusion standing.\n  - Informing policy initiatives aimed at expanding access and usage of financial services, household depositor outreach, and improving borrower access."
    },
    {
      "heading": "Publication and metadata",
      "content": "- Authors: Alexander Massara, André Mialou\n- Date: February 21, 2014\n- Series: Working Paper No. 2014/036\n- Issue: 036\n- Volume: 2014\n- Pages: 31\n- DOI: https://doi.org/10.5089/9781475569681.001\n- Stock No: WPIEA2014036\n- ISBN: 9781475569681\n- ISSN: 1018-5941\n- Subjects: Commercial banks; Expenditure; Financial inclusion; Financial institutions; Financial markets; Financial services; National accounts; Personal income; Public expenditure review\n- Keywords: a number of variable; access and usage of financial services; borrowers variable; Commercial banks; composite index value; cross-dimension composite index; factor analysis; Financial inclusion; geometric mean; Global; household depositor; income group; index; normalized variable; outreach variable; Personal income; Public expenditure review; scale invariance; usage variable; WP\n\nIMF Working Papers — \"Assessing Countries’ Financial Inclusion Standing - A New Composite Index\" by Alexander Massara and André Mialou (February 21, 2014).\n\n---\n\n Content in this bundle\n\n- wp1436\n  - wp1436 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - wp1436 (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2016/12/31/assessing-countries-financial-inclusion-standing-a-new-composite-index-41385"
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    "Authors: Alexander Massara, André Mialou",
    "Published: February 21, 2014",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781475569681.001",
    "Paper leverages the IMF’s Financial Access Survey (FAS) database to construct a new composite index of financial inclusion.",
    "Motivation:",
    "Problem statement:",
    "Data source:",
    "Index methodology:",
    "Technical features and terminology preserved from source:",
    "The paper:",
    "Analytical utility:",
    "Policy relevance emphasized:",
    "Potential applications:",
    "Authors: Alexander Massara, André Mialou",
    "Date: February 21, 2014",
    "Series: Working Paper No. 2014/036",
    "Issue: 036",
    "Volume: 2014",
    "Pages: 31",
    "DOI: https://doi.org/10.5089/9781475569681.001",
    "Stock No: WPIEA2014036",
    "ISBN: 9781475569681",
    "ISSN: 1018-5941",
    "Subjects: Commercial banks; Expenditure; Financial inclusion; Financial institutions; Financial markets; Financial services; National accounts; Personal income; Public expenditure review",
    "Keywords: a number of variable; access and usage of financial services; borrowers variable; Commercial banks; composite index value; cross-dimension composite index; factor analysis; Financial inclusion; geometric mean; Global; household depositor; income group; index; normalized variable; outreach variable; Personal income; Public expenditure review; scale invariance; usage variable; WP",
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