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The Digital Financial Inclusion Index: A Cross-Country Comparison

Author

Listed:
  • Tugba GUZ

    (İstanbul Yeni Yüzyıl Üniversitesi, Sağlık Yönetimi Bölümü, İstanbul, Türkiye)

  • Gulden POYRAZ

    (Bandırma Onyedi Eylül Üniversitesi, Dış Ticaret Bölümü, Balıkesir, Türkiye)

Abstract
The increasing impact of digitalization on the financial system and widespread use of technological devices such as smartphones that facilitate participation and access to the financial system in almost every segment of society have been this study’s motivating factor for creating a Digital Financial Inclusion Index (DFII). By following the methodology the Organisation for Economic Co-operation and Development used to create a combined index, the study examines the DFI levels and developments of 75 countries whose data can be accessed over a DFII calculated for the years 2017 and 2021 in comparison with current data. Within three years, the index values of the countries included in the DFII are seen to have increased or remained the same. High-income countries are seen to rank at the top of the DFII while the less developed countries with low income levels are found at the bottom. In addition, in order to compare the DFII values of the 75 countries covered in the index according to their income levels, the study divided the countries into four groups based on the World Bank income group classifications of high-income, upper-middle-income, lower-middle-income, and low-income brackets. Within three years, no significant difference was seen to have occurred between the average index values of countries in each income group, with very small increases occurring in their index values. In this process, lower-middle income countries increased their average DFII values by a very small margin of 0.02 compared to the high-income countries and of 0.01 compared to the upper-middle-income countries.

Suggested Citation

  • Tugba GUZ & Gulden POYRAZ, 2023. "The Digital Financial Inclusion Index: A Cross-Country Comparison," Journal of Economic Policy Researches, Istanbul University, Faculty of Economics, vol. 10(1), pages 157-180, January.
    • Handle: RePEc:ist:iujepr:v:10:y:2023:i:1:p:157-180
    DOI: 10.26650/JEPR1180972
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    References listed on IDEAS

    as
    1. Peterson K. Ozili, 2018. "Impact of digital finance on financial inclusion and stability," Borsa Istanbul Review, Research and Business Development Department, Borsa Istanbul, vol. 18(4), pages 329-340, December.
    2. Ozili, Peterson Kitakogelu, 2018. "Impact of Digital Finance on Financial Inclusion and Stability," MPRA Paper 84771, University Library of Munich, Germany.
    3. Chuka Ifediora & Kenechukwu Onochie Offor & Eze Festus Eze & Samuel Manyo Takon & Anthony Eboselume Ageme & Godwin Imo Ibe & Josaphat U. J. Onwumere, 2022. "Financial inclusion and its impact on economic growth: Empirical evidence from sub-Saharan Africa," Cogent Economics & Finance, Taylor & Francis Journals, vol. 10(1), pages 2060551-206, December.
    4. Juan Carlos Izaguirre & Timothy Lyman & Claire McGuire & Dave Grace, 2016. "Deposit Insurance and Digital Financial Inclusion," World Bank Publications - Reports 25707, The World Bank Group.
    5. Mandira Sarma, 2016. "Measuring Financial Inclusion for Asian Economies," Palgrave Studies in Impact Finance, in: Sasidaran Gopalan & Tomoo Kikuchi (ed.), Financial Inclusion in Asia, chapter 1, pages 3-34, Palgrave Macmillan.
    6. Purva Khera & Miss Stephanie Y Ng & Ms. Sumiko Ogawa & Ms. Ratna Sahay, 2021. "Is Digital Financial Inclusion Unlocking Growth?," IMF Working Papers 2021/167, International Monetary Fund.
    7. World Bank, 2009. "Banking the Poor : Measuring Banking Access in 54 Economies," World Bank Publications - Books, The World Bank Group, number 13804.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Digital financial inclusion index; Digitization; Digital finance; Finance; Financial inclusion JEL Classification : F65 ; O31 ; O33;
    All these keywords.

    JEL classification:

    • F65 - International Economics - - Economic Impacts of Globalization - - - Finance
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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