Financial Inclusion Index (FI-Index)

The Financial Inclusion Index (FI-Index) is a key measure of financial inclusion across India. The FI-Index stood at 64.2 in March 2024, up from 60.1 in March 2023, reflecting an overall improvement in financial inclusion across the country.

Overview of the FI-Index

• Purpose: The FI-Index measures the extent of financial inclusion in India, covering various financial services sectors including banking, investments, insurance, postal services, and pensions.
• Publication: Annually published in July.
• Value Range: The index value ranges from 0 to 100, where:
• 0 signifies complete financial exclusion.
• 100 signifies full financial inclusion.

Parameters of the FI-Index

• Access (35% weight): Measures the availability of financial services.
• Usage (45% weight): Assesses the extent of usage of financial services.
• Quality (20% weight): Evaluates the quality of financial services, including factors such as financial literacy, consumer protection, and service deficiencies.

Each parameter is further broken down into various dimensions, which are assessed using a total of 97 indicators.

Unique Features

• Quality Parameter: The inclusion of the Quality parameter is a distinctive feature of the FI-Index, reflecting not just the availability and usage of financial services but also the quality of those services.
• No Base Year: The index does not have a base year. Instead, it reflects cumulative efforts by various stakeholders over the years towards improving financial inclusion.

Recent Improvement

• Growth in Sub-Indices: The increase in the FI-Index from 60.1 to 64.2 between March 2023 and March 2024 indicates growth in all sub-indices, demonstrating progress in various aspects of financial inclusion.

The FI-Index serves as a comprehensive tool to track and analyze financial inclusion progress and helps in identifying areas that need further improvement