ABSTRACT
This chapter examines the conceptual and measurement issues involving financial inclusion. It defines the concept of financial inclusion. The chapter discusses the barriers to financial inclusion. It outlines measurement issues and data sources involving financial inclusion. The term financial capability refers to the ability of people to take informed financial decisions and develop ‘financially responsible and financially independent citizens’. The concept is more applicable in the case of developed countries where literacy levels and awareness are much higher. The idea of financial citizenship however, appears to be far-fetched in the context of developing countries where financial exclusion often comes along with other deprivations of health, education, absence of drinking water facilities and infrastructure. Education as a demand barrier in financial inclusion has also been considered by several studies. Poor education levels and illiteracy may prevent large number of people from accessing financial services. Various donor organisations, for instance the Gates Foundation, are also furthering the cause of financial inclusion.
