The present study aims to compute the level of financial inclusiveness in MENA region countries, considering the three fundamental dimensions that impact financial inclusion: depth, accessibility, and usage of financial services. Moreover, this article incorporates digital payments-related indicators, credit and debit cards, total borrowers, savers, and other indicators to create a more comprehensive financial inclusion index. A two-step PCA methodology with endogenous weighting is employed to develop the financial inclusion index. The data was collected from the IMF and the World Bank from 2010 to 2021. The resulting composite financial inclusion index (FI Index) can be compared across other countries in the MENA region over time, providing a valuable tool for policymakers and evaluators. The two-stage PCA approach implemented in this study addresses the issue of random weight selection and results in a more comprehensive evaluation of the degree of financial inclusion. In summary, this research enhances our understanding of financial inclusion in MENA region countries and offers a methodology to gauge and monitor progress.
