Financial Development and Financial Inclusion (FDFI)

Financial Development and Financial Inclusion (FDFI)

This course, presented by the IMF’s Institute for Capacity Development, outlines the macroeconomic relevance of financial development and financial inclusion. Beginning with an analytical framework that defines the role of finance in the economy, the course reviews the conceptual and empirical literature on the impact of finance on macroeconomic performance and growth. It also addresses key policy issues to encourage financial development (market enabling policies) and limit its potential destabilizing effects (market harnessing policies). The course introduces financial inclusion as an integral dimension of financial development—a perspective that has only recently received proper attention, as the discussion for many years revolved around the concept and measure of financial depth. The course reviews the indicators currently used to measure financial inclusion, the distinct macroeconomic impact of financial inclusion, and the main policy strategies that have been pursued.

Course Objectives: Upon completion of this course, participants should be able to: 

• Measure the level of financial development and inclusion for a country or countries by means of a wide range of standardized indicators. 

• Identify the shortcomings of various indicators as well as the possible need to collect more detailed microeconomic data. 

• Use a simple analytical model to predict the likely outcomes from different policies.

• Assess policy options and strategies for financial development and inclusion from a macroeconomic perspective, by identifying relevant tradeoffs and potential impediments. 

• Formulate a policy strategy to support financial development in a country, taking into account initial conditions and links between the financial sector and the macroeconomy.

Syllabus Course Structure and Syllabus