The level of financial inclusion in Ukraine: Measuring access, quality, and usage of financial products and services

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While financial inclusion is seen as a goal of socio-economic development, there is still no clear understanding of how to measure it. Following this concern, the paper deals with the computation of the financial inclusion index of the Ukrainian economy using an annual dataset spanning from 2008 to 2020 and following the Sarma methodology. The object of the study is a set of indicators of usage, access and quality of financial products and services. The obtained results demonstrate the medium level of financial inclusion. The improvement of financial inclusion is observed in 2012, 2013, 2020 (namely 0.55 – 0.56 in the range of 0 and 1). From 2015 (0.38) till 2018 (0.39), the revealed downward trend affirms that the withdrawal of banks from the market has deteriorated the level of quality and usage of financial products and services. Financial inclusion declined during the cleaning up of the banking system in 2014–2016, just as it did after the global financial crisis in 2009–2010. Despite the development of the payment infrastructure, there is a need to diversify access, increase quality, and quicken the usage of financial products and services due to existing distrust in national financial institutions. Improving financial literacy and consumer protection, and closing regulatory gaps in the non-banking sector are seen as ways to enhance financial inclusion. Thus, financial regulators should establish an upward trend in financial inclusion that will ensure full access to formal financial services and will not adversely affect the stability of financial system.

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    • Figure 1. Index of financial inclusion of the Ukrainian economy, 2008–2020
    • Table 1. Dimensions of the Ukrainian financial inclusion level, 2008–2020
    • Conceptualization
      Yuliia Shapoval
    • Formal Analysis
      Yuliia Shapoval
    • Investigation
      Yuliia Shapoval, Andrii Shkliar, Oleksii Shpanel-Yukhta, Kateryna Gruber
    • Methodology
      Yuliia Shapoval
    • Writing – original draft
      Yuliia Shapoval
    • Funding acquisition
      Andrii Shkliar, Oleksii Shpanel-Yukhta, Kateryna Gruber
    • Project administration
      Andrii Shkliar
    • Supervision
      Andrii Shkliar
    • Software
      Oleksii Shpanel-Yukhta
    • Visualization
      Oleksii Shpanel-Yukhta
    • Validation
      Kateryna Gruber
    • Writing – review & editing
      Kateryna Gruber