Construction Of Inclusive Finance Index And The Influential Factors Of Financial Inclusion

Financial Inclusion was first proposed in the International Year of Microcredit of 2005.An inclusive financial system can provide financial services to the disadvantaged groups so that it can alleviates poverty and improves economy.This paper firstly identifies financial inclusion and concludes that financial inclusion is a concept with the aim of including excluded individuals and business.Disadvantaged groups refer to people who are excluded from financial services because of market failure instead of the poor people.Therefore,it is critically important to explore the influential factors of financial inclusion.This study focuses on the relationship between financial development and financial inclusion.Previous studies have shown that financial development is related to economy development.Is it possible that financial inclusion is also affected by financial development?To answer these questions,this study used 124 countries from 2004 to 2014 to examine the impact of financial development on financial inclusion.There structure of this study is as follows:1.Introduction.We will introduce the background,propose the economic problem,provide research objectives,contributions and limitedness.2.Literature Review.We reviewed a large amount of literature and built a solid economic foundation for this study.We proposed assumption based on the literature review.3.Data and Methodologies.We compared existing databases,described data sources for inclusive finance index construction and explanatory variables.We also explained the models and index construction methods.4.Descriptive Analysis.We analyzed the inclusive finance index(IFI)by year,by economy class and by countries.We found that IFI is positively related to the economy.IFI has increased for the majority of the countries from 2004 to 2014.What's more,IFI has decreased shortly since 2008 but high income countries continued the trend.5.Empirical results.We compared traditional panel data model and spatial panel data model as well as took the robustness test to see the impact of financial development.We found that financial development would positively affect financial inclusion.A more competitive financial sector is more suitable for financial inclusion.In addition,mobile banking is also important for financial inclusion.6.Conclusions and Implications.We concluded the results from previous chapters and derive some implications.