Global Financial Inclusion Index 2023: Key Findings

The Global Financial Inclusion Index 2023, published by the Economist Intelligence Unit, measures the extent to which individuals have access to and use financial services. The index covers 174 countries and territories, and is based on 71 indicators across three dimensions:

• Access: This dimension measures the availability of financial products and services, as well as the ability of individuals to access them.
• Usage: This dimension measures the actual use of financial products and services by individuals.
• Quality: This dimension assesses the quality of financial services, including the affordability, reliability, and convenience of these services.

The overall score of the Global Financial Inclusion Index ranges from 0 to 100, with a higher score indicating a greater degree of financial inclusion.

In 2023, the global average score was 63.4, up from 62.5 in 2022. This represents a modest improvement in financial inclusion over the past year.

However, there is still a significant gap in financial inclusion between developed and developing countries.

In developed countries, the average score on the Global Financial Inclusion Index was 78.6, while in developing countries the average score was 58.1.

This suggests that there is still much work to be done to ensure that everyone has access to and uses financial services.

Key Trends in Financial Inclusion

The Global Financial Inclusion Index 2023 identifies a number of key trends in financial inclusion:

• The rise of digital financial services: Digital financial services, such as mobile banking and mobile money, are playing an increasingly important role in expanding financial inclusion. In 2023, 71% of adults worldwide had a mobile phone account, and 45% of adults had an account with a mobile money provider.
• The growing importance of financial education: Financial education is essential for helping people understand and use financial services effectively. In 2023, 58% of adults worldwide had received some form of financial education.
• The need to address the specific needs of vulnerable groups: Vulnerable groups, such as women, the poor, and people living in rural areas, are often disproportionately excluded from the financial system. In 2023, the global gender gap in financial inclusion was 5.1 percentage points, and the gap between rural and urban areas was 10.9 percentage points.

Country Performance

The top 10 countries in the Global Financial Inclusion Index 2023 are:

1. Singapore
2. Sweden
3. Netherlands
4. Finland
5. Norway
6. Denmark
7. Hong Kong
8. Switzerland
9. Australia
10. Canada

These countries all have highly developed financial systems, and their citizens have a wide range of financial products and services available to them.

The bottom 10 countries in the Global Financial Inclusion Index 2023 are:

1. Yemen
2. Somalia
3. Eritrea
4. Chad
5. Central African Republic
6. Afghanistan
7. Burundi
8. Haiti
9. Democratic Republic of the Congo
10. South Sudan

These countries have less developed financial systems, and their citizens have more limited access to financial products and services.

Challenges and Opportunities

The Global Financial Inclusion Index 2023 highlights a number of challenges and opportunities that need to be addressed in order to expand financial inclusion:

Challenges:

• The high cost of financial services: In many countries, the cost of financial services is too high for low-income individuals and businesses. This makes it difficult for them to access and use financial services.
• The lack of financial education: Many people lack the knowledge and skills they need to use financial services effectively. This can lead to financial problems, such as over-indebtedness and fraud.
• The exclusion of vulnerable groups: Vulnerable groups, such as women, the poor, and people living in rural areas, are often disproportionately excluded from the financial system. This can hinder their economic development and social well-being.

Opportunities:

• The rise of digital financial services: Digital financial services, such as mobile banking and mobile money, can help to reduce the cost of financial services and expand access to financial services in remote areas.
• The growing importance of financial education: Financial education can help people understand and use financial services effectively, and can help to reduce financial problems.
• The increasing focus on financial inclusion policy: Governments and policymakers are increasingly focused on financial inclusion, and are developing policies and programs to promote financial inclusion.

Conclusion

The Global Financial Inclusion Index 2023 shows that there has been some progress in financial inclusion over the past year. However, there is still a significant gap in financial inclusion between developed and developing countries, and vulnerable groups are often disproportionately excluded.