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Theoretical and Applied Economics
No. 3 / 2022 (632), Autumn

Measuring financial inclusion and its present status in South Asian countries. Evidence from a multidimensional Financial Inclusion Index

Susanta Kumar SETHY
Rajendra University, Odisha, India
Phanindra GOYARI
University of Hyderabad, India

Abstract. The purpose of this paper is to measure the level of financial inclusion in South Asian countries. A sample of seven South Asian countries (Afghanistan, Bangladesh, Bhutan, India, Maldives, Pakistan, and Sri Lanka) for the period 2004 to 2018 is being considered for this study. In order to find out the level of financial inclusion, we have proposed a multidimensional Financial Inclusion Index (FII) for South Asian countries but excluded Nepal because of the non-availability of relevant data. This paper reflects the comparative position of financial inclusion among the countries in South Asia. Overall cross country study evidence that the performance of all South Asia countries in financial inclusion (i.e. Financial Inclusion Index) has been increasing from 2004 to 2018 but interestingly, among seven South Asian countries, India is the only country that performs better with the highest value of FII from 2013 to 2017. Furthermore, the results reveal that all South Asian countries were included in the high financial inclusion category in 2018.

Keywords: financial services, financial inclusion, Financial Inclusion Index, South Asia.

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