Towards a new index of mobile money inclusion and the role of the regulatory environment
Godsway Tetteh, Micheline Goedhuys, Maty Konte & Pierre Mohnen
#2020-035
It is an undeniable fact that financial inclusion has become a global
policy priority. Despite its popularity in the policy sphere, the
concept of financial inclusion lacks a comprehensive measure to monitor
and evaluate inclusive financial systems across the globe. To fill this
gap, we combine macro-level data from the Financial Access Survey of the
International Monetary Fund and the World Bank’s Global Findex database
to construct novel indices of financial inclusion. First, we compute new
financial inclusion indices that incorporate access to financial
services by groups prone to exclusion. Second, we account for the recent
upsurge in mobile money adoption in the developing world by computing a
novel mobile money inclusion index. We further relate the financial
inclusion indices with legal origin to ascertain the role of initial
conditions of the regulatory environment in countries’ financial
inclusion achievements. We find that whereas developed countries
continue to lead in banking inclusion, developing countries in
sub-Saharan Africa are at the frontiers of mobile money inclusion. Also,
we find evidence suggesting that the regulatory environment matters for
financial inclusion.
Keywords: Financial Inclusion, Banking Inclusion, Financial Innovation,
Mobile Money Inclusion
JEL Classification: G21, O16, O35, O57