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What Is the Financial Inclusion Index (FII)?
The financial inclusion index is a global ranking of countries based on their accessibility of financial products and services, in accordance with 42 worldwide financial markets. These pillars are treated as key factors for encouraging financial inclusion across the world population. The report is published annually by global financial and research institutions and authorities.

The index covers 174 countries and has its scale with scores. The higher the score, the better a country's financial inclusion is measured. Additionally, an average global inclusion score is derived to understand the difference and growth in financial inclusion compared to past or prior years. However, a major gap is always observed between developed and developing nations.
Key Takeaways
- The Financial Inclusion Index is an annual global ranking of nations based on the level of access the population has to different financial services.
- The ranking is based on a score which is derived from a scale of 0 to 100. The better the score, the higher degree of financial inclusion is observed in the underlying country.
- The major parameters are accessibility, usage and quality. The fourth indicator is the assessment of how FI affects households and the performance level or human capital investments of firms.
- As per the 2023 FII report, the US fell to fourth place worldwide in the study of 42 markets due to low consumer sentiments.
Financial Inclusion Index Explained
The financial inclusion index measures the extent to which individuals of a certain country are in accessibility to different financial products and services. The index holds a ranking list of over 174 countries checked and analyzed on mainly three pillars of the FI index. First is government support, which reflects the government's promotion of financial inclusion and evaluates how authorities encourage people to use financial services and products. The second pillar is the financial system support, this parameter showcases various financial products and types of financial services that are easily available to the people in a country. Lastly, employer support evaluates the organizations and companies' support level as employers promote financial products and their usage among their employees, staff and management.
The global financial inclusion index has a scale of from 0 to 100; the better the score, the higher financial inclusion is recorded. The global financial data is collected by renowned global authorities such as the World Bank and IMF, along with other small yet in-depth research analysis firms. For instance, the Global Findex is a public database that gauges people's use of financial products and services across economies. It was created by Gallup and the World Bank and is funded by the Bill and Melinda Gates Foundation.
The index covers and summarizes the scores based on many metrics and indicators derived from a combination of survey research and publicly available data sources. The data points are analyzed further to arrive at an indicator score, subsequent pillar score, and headline Index ranking by market. The whole model is also based on a series of assumptions that may change with time, and hence, investment decisions shall not be based on it.
Parameters
There are three parameters of the financial inclusion index are -
- Quality - A major parameter that derives from the quality of financial instruments, products and services that are made available to the public. The quality depends on the financial literacy and grievance redressal services, including their affordability, pricing, reliability and convenience.
- Usage - Lastly, this parameter calculates the actual use of financial products and services that individuals currently utilize. It includes formal bank accounts, cashless transactions, remittances, insurance covers, credit among adults and account usage frequency.
- Accessibility determines the ability of individuals in a country to access several types of financial products and services. It mainly includes physical and digital services.
Examples
Here are two examples of the FI index: the first is hypothetical, whereas the second is world news -
Example #1
Suppose a fictitious country with a weak financial system. The country is a small, underdeveloped nation or sometimes categorized as a developing one. People have low consumer confidence in the banking and financial system; most people like to save their money at home and do not invest, buy financial products or subscribe to financial services.
Its market is small, with only a few resources, and the overall socio-political scenario of the country is poor. Its GDP is declining, the cash flow is stuck, and even people who want to invest and purchase financial products have only a few options with limited accessibility. Such a nation will fall below the list of the financial inclusion index, which simply ranks countries based on their financial inclusion. It is a simple FII example. At the same time, a well-developed country with a strong financial system will have a high position in the index.
Example #2 - Financial Globalization Examples in the Philippines
For the second example, as per the second annual Financial Inclusion Index 2023 report, the United States declined to fourth place from its second position. It reflects on how poorly the accessibility, usage and affordability of financial services and products have decreased.
The data was compiled by the Centre for Economics and Business Research in London and Des Moines, which is a Principal Financial Group. Singapore holds the top position, followed by Hong Kong and Switzerland. The research tested 42 markets, but the US consumer sentiment is down, leading to uncertainty and delays in purchase decisions and involvement with financial products and services.
Importance
The importance of the financial inclusion index is -
- It serves as a global index informing on the utility, access, quality and scope of financial products and services in a country.
- The index induces healthy and organic competition among nations to promote financial inclusion.
- Based on the ranking and score in the index, the countries can self-assess their positions and weaknesses in the financial system and tend to improve it.
- It is majorly concerned with the overall growth and promotion of more and more financial products and services in countries across the world.
- The index operates with the aim and positive responsibility to reduce poverty and inequality.
- It plays an important role in reflecting the financial inclusion of developing countries with low resources and weak financial frameworks.
- The ranking comprehensively covers all sectors and industries of an economy in a single index.