Financial Inclusion White Paper - NCR

Measurement System
Appendix
A critical component of any business is the ability to measure its success and
impact. Therefore we are proposing the Economic Improvement Quotient (EIQ)
for future considerations.
While existing indicators such as Gross Domestic Product (GDP), Gross National
Income (GNI), Per Capita Income (PCI) and the Human Development Index (HDI)
all play an important role in measuring various elements of the economy and
human development, we propose an equation to measure the change in the socioeconomic
value of an individual or a common population-set due to the direct
impact of banking systems
1. Economic Improvement Quotient (EIQ)
The Economic Improvement Quotient (EIQ) is based on the fundamental
assumption that rendering of financial services to the underserved population in a
favorable external environment (with policy and technology support) results in
the improvement of an individual or group’s economic status.
The EIQ has been designed to assist government officials, policy makers, banking
and financial services organizations, technology providers, and other stakeholders
associated with financial inclusion to measure the positive impact created by the
penetration of banking and financial services.
The equation is based on three variable factors:
• The range and type of financial services offered
• The current policy environment and how supportive it is towards financial
inclusion in terms of specific policies and initiatives
• Enabling technologies available to scale access to financial services to a
wider population
Definition:
Economic Improvement Quotient (EIQ) is the value that determines the
incremental change in the selected population-set due to its exposure to
banking and financial services in the presence of the existing policy
environment and technology enablers.
i = n
∑ w1(Financial Services Renderedn) X [w2(Policy Support)+w3(Technology enabler)]
i = 1
= EIQ
Where n = Number of Financial services rendered; w1, w2, w3 = Weighted
Average, Scale from 0 to 10
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