A Cross-Country Evaluation of Financial Inclusion and its Linkage with Growth and Development

The study measures the status of Financial Inclusion across the globe for the twelve-year period 2005-16. The Index of Financial Inclusion (IFI) is measured through the normalized Euclidean approach cited by Sarma (2008) taking into account the indicators of access to and usage of financial services. Principal Components Analysis technique has been employed to derive the weightage of the indicators in determining the index. The study endeavours to explore the contribution of financial inclusion towards growth and development of the countries through the statistical technique, Granger-Causality. It suggests a bi-directional relationship of the country's financial inclusion towards growth and development.