Financial inclusion in general and its evaluation for Turkey

The concept of financial inclusion is a concept that needs to be examined on the basis of the literature and empirically. This concept is thought to be a very important indicator showing the level of financial development of a society. So much so that the extent to which the economic factors are covered by the financial system is directly proportional to the welfare rate of the society. Although there are different definitions in both academic and international literature, financial inclusion is the most basic; means that all segments of a population, including those with the lowest incomes, have access to official financial products and services. The main purpose of this research is to measure the extent of financial inclusion in Turkey in the most effective way. Sarma (2008) introduced the financial inclusion index and the calculation method of this index to the literature in order to measure financial inclusion. This index takes a value between 0 and 1, and results close to 0 are defined as low in terms of financial inclusion, and results close to 1 are defined as high in terms of financial inclusion. This method, which is evaluated through banking indicators, has been a light for many researchers. In this study, financial inclusion index was calculated with 2 different methods for 81 provinces of Turkey between 2015 and 20200, by measuring with the classic indicators as in Sarma's (2008) study, and also by using different indicators that can be taken as reference apart from these indicators. The results calculated by the two different methods were compared on the basis of provinces and it was seen that there were differences in the calculation results using additional indicators to the indicators used in the classical method. It has been determined that the calculation results made with the classical method are lower than the calculation results made with the alternative method. The differences between the calculated values show how diverse the dimensions and indicators selected during the calculation of the financial inclusion index are, and that the financial development level of a province cannot be measured only by the number of bank branches and ATMs in that province, and that the relevant province can be included in the financial system differently due to its geographical and demographic structure. Keywords: Financial Inclusion, Financial Exclusion, Financial Acces, Financial Inclusion Index, Measuring Financial Inclusion