Financial inclusion index

Why in News?

  • The Union Minister of Finance and Corporate Affairs has launched the Financial Inclusion Index.

Financial Inclusion Index:

  • Department of Financial Services (DFS), Ministry of Finance will release an Annual Financial Inclusion Index (FII).
  • The index will be a measure of access and usage of a basket of formal financial products and services that includes savings, remittances, credit, insurance and pension products.
  • The index will have three measurement dimensions:
    • Access to financial services
    • Usage of financial services
    • Quality
  • The single composite index gives a snap shot of level of financial inclusion that would guide Macro Policy perspective.

Utility of the Index:

  • The various components of the index will help to measure financial services for use of internal policy making.
  • Financial Inclusion Index can be used directly as a composite measure in development indicators.
  • It enables fulfillment of G20 Financial Inclusion Indicators requirements.
  • It will also facilitate researchers to study the impact of financial inclusion and other macro-economic variables.
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