Financial Inclusion Index And Empirical Study Based On Global Perspective

Recently,financial inclusion has attracted more and more attention from the world.According to the latest forecast,more than half of the poor in developing countries do not have formal financial institution accounts,more than 35%of micro-enterprises have difficulty in obtaining formal financial services.In order to eliminate the huge gap in the availability and use of different groups of financial services,more than 60 countries and regions have established formal financial inclusion development goals.Many scholars have analyzed the promotion effect of financial inclusion on economic growth from the theoretical perspective,but the difficulties on measuring financial inclusion development have led to the relatively few empirical studies on financial inclusion.Therefore,how to effectively measure the level of financial inclusion development has become the focus of academic studies.Most of the previous studies have measured the level of development of financial inclusion from availability and use dimensions,and the cross-sectional data are used for the index synthesis and empirical studies.This paper first introduces the financial inclusion cases and the indicator systems of international organizations.The World Bank and the IMF indicator systems measure the level financial inclusion development from the demand side and the supply side respectively.The GPFI indicator system integrates the data of the demand side and the supply side.The AFI indicator system features a customizable standard based on national conditions.Then,this paper introduces the selection and synthesis of dimension index of Financial Inclusion Index.This paper calculates the Financial Inclusion Index panel data of 154 countries and regions from the availability,use and financial service quality dimensions,which uses the spatial synthesis method.At the same time,this paper also constructs the Financial Inclusion Extended Index with cross-sectional data for 2011 and 2014.Financial InclusionExtended Index and the corresponding year's Financial Inclusion Index are strongly correlated,indicating that the Financial Inclusion Index can accurately reflect the level of financial inclusion development.Afterwards,based on the panel data of Financial Inclusion Index,this paper constructs a fixed effect model and analyzes the relationship between financial inclusion and economic growth.The empirical results show that financial inclusion development plays an important role in promoting economic growth.It is found that the promotion effect of financial inclusion on economic growth will decrease with the increase of real GDP per capita.Besides,low-income countries' promotion effect is relatively low,which could be explained by the fact that low-income countries are affected by the relatively poor social system and infrastructure.Therefore,countries and regions with low incomes should pay attention to the social system and infrastructure in order to fully utilize promotion effect of financial inclusion.For relatively low income countries and regions where infrastructure and social security reach a certain level should pay more attention to the development of financial inclusion than the countries with higher income.Finally,this paper gives following policy recommendations based on the study of financial inclusion and the success cases:(1)Improve the construction of financial inclusion system,improve the level of government collaboration,and raise the awareness and attention of the whole society to financial inclusion.(2)Promote the development of digital financial inclusion,provide more flexible products and services for financial consumers with technical means,but also pay attention to the related risks.(3)Guide financial innovation,construct multi-level financial system and increase the availability of financial with a lower cost.(4)Establish a sound credit information system.The reduction of information asymmetry can help financial institutions to control the risk and help financial consumers to obtain funds at a lower cost as well.(5)Improve the popularity of financial-related knowledge,improve the financial consumer protection framework and effectively protect its fair and reasonable use of financial services and enjoy the benefits of financial development.(6)Strengthen the corporate level of financial inclusion development,and guide financial institutions to help small and medium enterprises to make up for the financing gap and provide targeted financial services for SMEs.