The New Paradigm:Definition and Measurement of Financial Inclusion

Abstract

To date, various scholars and promoters has defined and measured financial inclusion in different ways; but conceptually with no difference with inclusive financial system. Most of the definitions and measures previously given for financial inclusion are definitions for inclusive financial system ((Sarma (2008), Hameedu.M.Sh, (2014), Sophastienphong and Kulathunga (2008) and Arora (2010)), but not definitions for financial inclusion. However, for the researcher inclusive financial system and financial inclusion is different; that is, the former is cause to the later or the later is effect of the former. Therefore, this paper has reviewed existing literatures on definition and measurement of financial inclusion and proposed new definition and measurement with corresponding conceptual framework. Accordingly, financial inclusion is the function of inclusive financial system, consumer protection, and financial and academic literacy.

Keywords: Financial Inclusion, Inclusive Financial System, Access