Digital Financial Inclusion in Emerging and Developing Economies: A New Index

By Purva Khera, Stephanie Y Ng, Sumiko Ogawa, Ratna Sahay

March 19, 2021

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Purva Khera, Stephanie Y Ng, Sumiko Ogawa, and Ratna Sahay. Digital Financial Inclusion in Emerging and Developing Economies: A New Index, (USA: International Monetary Fund, 2021) accessed December 21, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

Adoption of technology in the financial services industry (i.e. fintech) has been accelerating in recent years. To systematically and comprehensively assess the extent and progress over time in financial inclusion enabled by technology, we develop a novel digital financial inclusion index. This index is based on payments data covering 52 developing countries for 2014 and 2017, taking into account both access and usage dimentions of digital financial services (DFSs). This index is then combined with the traditional measures of financial inclusion in the literature and aggregated into an overall index of financial inlusion. There are two key findings: first, the adoption of fintech has been a key driver of financial inclusion. Second, there is wide variation across countries and regions, with the greatest progress recorded in Africa and Asia and the Pacific regions. This index should offer a useful analytical tool for researchers and policy makers.

Subject: Financial inclusion, Financial markets, Financial services, Fintech, Mobile banking, Population and demographics, Technology

Keywords: Account ownership, Adoption of technology, Africa, Asia and Pacific, Capital markets department, Caribbean, Digital financial services, Financial inclusion, Financial services industry, Fintech, Global, Mobile banking, Services play

Publication Details

Pages:

33
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2021/090
Stock No:

WPIEA2021090
ISBN:

9781513574196
ISSN:

1018-5941

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