Measuring Financial Access

Financial access is gradually being recognised as an important input to economic development. Using World Bank (2007) database, this study examines the extent of financial access in developed and developing countries. Further, it develops a new socio-economic development index which incorporates financial access. It then compares socio-economic development of various countries as shown by HDI alone, and by the new index incorporating financial access. The results of the study show that Belgium ranks highest in terms of financial access among all the countries considered, followed by Spain and Germany. In addition, the ranking of countries in terms of HDI changes if financial access is taken into account.