Construction of a regional financial ınclusion ındex in Turkey

Abstract

This paper examines a multidimensional measurement of financial inclusion to gauge the extent of financial system across time in Turkey. A multidimensional index of financial inclusion has been developed to allow for comparison among regions and provinces of Turkey in terms of financial inclusion for policymakers. Financial access indicators are used to construct and index lying between 0 and 1. The normalized indicators are than extracted by the Euclidean distance formula. The empirical results show that financial inclusion values are parallel to the income levels of the regions and provinces. The high income level regions and provinces tend to have higher levels of financial inclusion and vice versa. These results should be primarily used by policymakers for future reference of the new legislations of financial inclusion.