Financial Inclusion and Financial Literacy: A Composite Index and Clustering Approach
DOI:
https://doi.org/10.47613/reflektif.2026.300Keywords:
Financial inclusion, Financial literacy, Principal Component Analysis, Cluster analysis.Abstract
This study examines the association between financial inclusion and financial literacy across 30 OECD countries. A composite Financial Inclusion Index covering access, usage, and depth is constructed using Principal Component Analysis, and countries are grouped through K-means clustering. The resulting clusters are compared in terms of overall financial inclusion, its underlying dimensions and indicators, and financial literacy, highlighting areas requiring further development across the dimensions of financial inclusion. The findings indicate a positive but non-linear and heterogeneous association between financial inclusion and financial literacy. Substantial heterogeneity emerges among countries transitioning from medium to high financial inclusion, while similar financial inclusion profiles may correspond to markedly different financial literacy levels.
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