Digital Financial Inclusion in Emerging and Developing Economies: A New Index
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, this study has developed a novel digital financial inclusion index based on payments data covering 52 developing countries for 2014 and 2017.
This paper aims to fill the existing gap in literature by incorporating both measures of access to and usage of financial services industry into the measurement of financial inclusion. It offers a useful analytical tool for researchers and policy makers.
The two key findings of the paper are:
- The adoption of fintech has been a key driver of financial inclusion.
- There is wide variation across countries and regions, with the greatest progress recorded in Africa and Asia and the Pacific regions.